Birth of the biggest synthetic fiber corporation in Korea ..Integration of the polyester business between SK chemicals/Samyang in October. Source : Korea Economy Newspaper 2000. 07.04 The biggest domestic synthetic fiber corporation with $583 million dollars in assets and $833 million dollars in sales will be born in this October. At the Koreana Hotel in Taepyung-Ro Seoul on the 3rd, SK chemicals and Samyang had a signing ceremony on the integration of the polyester business and agreed to establish a new integrated corporation in early October. Capital for the new corporation is $208 million dollars with a 50/50 share. The CEO will be selected from the officers of either company. It has been announced that both companies will transfer debt with machine facilities and will set the debt ratio below 200 % which is below the average for this business field. From this integration, both companies expect synergic effects worthy of $58 million dollars per year through common purchase of materials, saving manufacturing and operating costs through the integration of marketing, research and development. Mr. Uk-Hyun Chang, Director of Fiber and Home Industry at the Ministry of Commerce, Industry and Energy evaluated that it is the first voluntary business trade after the those in 7 businesses, and predicted that it would motivate the participation of other synthetic fiber manufacturers. After transfer of the fiber field which contributed 45 % of total sales, Samyang will be a food, chemistry and life science company with $667 million dollars in sale, $750 million dollars in assets and 80 % of debt ratio. SK chemicals will be a chemistry and life science company with $500 million dollars in sales decreased from $708 million dollars and 150 % of debt ratio. The long fiber and short fiber production capacity of the integrated corporation will be 232 MT and 399 MT which is the 2nd and 1st in Korea respectively. In the world market, the size of the new corporation is the 8th and the 4th in the long fiber and short fiber fields respectively. Meaning of Synthetic fiber business integration: The integration will be a prelude for a voluntary restructuring of the synthetic fiber business. President Min-Ho Cho of SK chemicals announced the intention on further integration by saying that the door is open to any company that agrees with the basic idea of integration. The first candidate to join the integration is Saehan. The Korea Development Bank, which holds the most bonds of Saehan, is reported not to oppose the integration. Hyosung and Kolon are also considering independent integration of business units of both companies and are negotiating. Hyosung has already merged Dongyang nylon and Dongyang polyester. It is considering merging Dongguk Hapsum or other less stable companies. Kolon has discussed merging Kumkang Hapsum. Kumkang Hapsum was constructed by Kolon Engineering and has licensed technology from Toray just as Kolon so the chance of integration is very high. ¨In the end, the business will be end up with 4 companies including the Integrated Corp., Hyosung, Kolon, and Teakwang, forcasted Mr. Jung-Hoon Lim at Hyundai Securities Co.