이 기사는 2022년 02월 09일 08시08분 thebell에 표출된 기사입니다

Ssangyong C&E, a South Korean cement maker owned by private equity firm Hahn & Company, is expanding its recycling business with its acquisition of a local waste management company.

In November last year, Hahn & Co purchased 100% of Samho Environmental Technology from VL Investment for about 45 billion won ($37.5 million) as an add-on acquisition for the cement manufacturer, according to sources.

Ssangyong C&E approached VL Investment about a takeover of Samho Environmental Technology, in which the investment firm bought a 100% stake in December 2020.

With less than a year of its investment, VL Investment had no plan to sell its stake in the waste recycling company last year. But it ultimately decided to exit the investment earlier than planned following aggressive pursuit by Ssangyong C&E.

The cement maker has stepped up efforts to restructure its business operations in the past year with a focus on expanding its recycling business. This is aimed at responding to tightened environmental regulations and creating synergies with existing businesses.

The purchase of Samho Environmental Technology is also in line with that strategy. The company produces solid recovered fuels that are made from household and industrial waste and can serve as a substitute for carbon-based fuels.

Samho Environmental Technology is the biggest player in the country’s solid recovered fuel market by production capacity, with the company capable of processing up to 300,000 tons of plastic waste a year. Its customers include cement makers, paper manufacturing companies, combined heat and power plants, and industrial boiler manufacturers.

The company has been in the red in recent years, with an operating loss of 2.6 billion won on revenue of 9.1 billion won in 2020. It also generated negative earnings before interest, taxes, depreciation and amortization of 1.2 billion won in that year.

Hahn & Co and Ssangyong C&E are expected to try to maximize the upside potential of Samho Environmental Technology, possibly by exploring collaboration opportunities with existing recycling services and pursuing additional add-on acquisitions. (Reporting by Gyoung-tae Kim)