Sungchang Enterprise Holdings Decides to Suspend Formalin Business Division, Expects Earnings Improvement

Sungchang Enterprise Holdings decided to suspend the formalin business division of its subsidiary Sungchang Enterprise effective June 30, 2026.
The suspension is due to soaring methanol prices caused by the Middle East war, which eroded cost competitiveness. The division's 2025 sales were approximately 7.08 billion KRW, accounting for 5.57% of the parent's consolidated sales.
The company will focus on its core wood manufacturing and sales business and diversify formalin sourcing to reduce costs, aiming to improve the consolidated earnings structure.
Affiliate companies will secure stable formalin supply from alternative sources, so no production disruption is expected.
[AI Summary]Sungchang Enterprise Holdings' decision to shut down the loss-making formalin division and focus on core operations is positive for mid- to long-term profitability. Although short-term sales may dip slightly, the cost savings are expected to outweigh the loss, potentially enhancing shareholder value.