Bukwang Pharmaceutical which returned to profitability last year, has launched a rights offering to push ahead with a major structural overhaul. The company aims to resolve long-standing issues such as aging production facilities and a low-margin business model, while laying the groundwork for sustainable growth.
At a briefing on March 31, CEO Lee Jae-young stated, “To become one of the top 20 pharmaceutical companies in Korea by 2030, we need to secure a stable supply system, enhance manufacturing competitiveness, and strengthen R&D capabilities. We plan to use the proceeds from the rights offering to achieve these goals.” On March 28, the company announced plans to raise capital through a rights offering, including a shareholder allocation followed by a public offering of forfeited shares.
“Bukwang Pharmaceutical has faced chronic growth barriers, including production facilities over 40 years old, a revenue structure focused on low-margin essential drugs, and a lack of new growth engines. These have weighed down our corporate value,” Lee explained. “Now that we’ve turned a profit, I believe it’s the right time to address these challenges head-on.”
Although the company currently holds about KRW 40 billion ($30 million) in net cash assets, it sees limitations in using this for long-term investment. The new funds will be allocated to the following areas: 43% for facility upgrades at the Ansan plant, 31% for acquiring a new manufacturing site, and 26% for strengthening R&D.
The company plans to invest approximately KRW 49.5 billion ($37 million) in two phases KRW 20 billion ($15 million) and KRW 30 billion ($22 million)—to remodel its production facilities. The initial KRW 20 billion will focus on resolving persistent product shortages, with further investments depending on market conditions. “Due to limited production capacity, we’ve experienced frequent stockouts. A KRW 20 billion investment is expected to increase solid dosage production capacity by 40%, which should directly boost sales,” said Lee.
Acquiring a new manufacturing site is another key strategy. The company aims to enter the synthetic drug CDMO (Contract Development and Manufacturing Organization) business by acquiring an external facility. “We are conducting preliminary due diligence on two to three candidates, most of which are engaged in CMO (Contract Manufacturing Organization) operations,” Lee said. “By combining Bukwang’s R&D capabilities with their manufacturing infrastructure, we plan to expand into CDMO.” The estimated investment is around KRW 35 billion ($26 million), and depending on the acquisition cost, the Ansan plant remodeling budget may be adjusted.
R&D investment is also a central focus. The company plans to reinforce its in-house research capabilities beyond its current open innovation strategy, focusing on improved formulations and incremental innovation drugs. Approximately KRW 30 billion ($22 million) is allocated for this purpose.
Lee concluded, “We aim to become one of the top 20 pharmaceutical companies by 2030 based on revenue, with an operating profit margin exceeding 10%. As we achieve results, we will actively implement shareholder return policies to reward our investors.”
