Below is the excerpted article from the Korea Herald.
CJ zeroing in on core business lines
CJ Corp., the nation's largest food processing firm, is getting out of home and personal care as part of its downsizing to four core operations.
On Tuesday, the food giant signed a memorandum of understanding with Japan's Lion Corp. to sell 81 percent of its Home & Personal Care for 48 billion won.
The deal is to be completed by early next year, giving CJ 13.6 billion won to pay off debt, the company said.
"We want to improve profitability by restructuring our underperforming business and continue focusing on businesses of core competency," said Jerad Kim, senior analyst of CJ Corp.'s public relations department.
The company's four key sectors are: food and food services, bio pharma (biotechnology and pharmaceuticals), entertainment and media, home shopping and logistics.
Last year, CJ's Home & Personal Care revenue totaled 160 billion won, compared with Lion Corp.'s revenue of 3 trillion won.
The Japanese home and personal care business, which ranks No. 2 in Japan, plans to utilize CJ's accumulated know-how, including production technology and marketing skills, to strengthen its presence in Korea.
CJ said that it would not participate in management of the unit.
Industry analysts gave a positive assessment of CJ's move. Samsung Securities Co. said the 13.6 billion won profit was high considering that the sale price of the business was at the high end. It also said that by selling off a non-core business, the company could expect to bolster its financial health.
Hannuri Investment & Securities Co. also gave a thumbs-up, pointing out that the Home & Personal Care unit's operating profit margin takes up 1.2 percent of a total of 8.3 percent. Without this line of business, CJ's operating margin is expected to increase to 8.8 percent.