The strengthened role of Hanwha General Chemical Co. within the country’s ninth largest conglomerate suggests accelerated hereditary succession in the family-run group, industry watchers noted.

According to sources on Sunday, Hanwha General Chemical will be the largest shareholder with a 50.15 percent stake in Hanwha Q-Cell Korea Co. once it buys additional shares to be issued by the solar cell and PV module producer on Nov. 16. Hanwha General Chemical already owns half of Hanwha Total Petrochemical Co., the most lucrative affiliate in Hanwha Group’s chemical affiliates.

Hanwha General Chemical, an adopted unit following acquisition from Samsung Group, would emerge as the largest shareholder of Hanwha’s core affiliates despite poor performance its mainstay products.

Yet it quickly gained status within the conglomerate so that it would be instrumental to empower the three sons of group chairm Kim Seung-yeon - Kim Dong-kwan, Dong-won and Dong-sun.

The three sons wholly own Hanwha S&C Co., the IT service unit of the conglomerate, and Hanwha S&C fully controls Hanwha Energy Corp., the parent company of Hanwha General Chemical. Dong-kwan, chief commercial officer of Hanwha Q-Cells, has 50 percent of Hanwha S&C. Dong-won, head of Hanwha Life Insurance’s Innovation Center, and Dong-sun, new growth strategy team leader at Hanwha E&C Co., each own 25 percent in Hanwha S&C.

Hanwha General Chemical also controls Hanwha Total Petrochemical and Hanwha Q-Cell Korea. All of these companies are privately held.

The business community also calls for more attention to the rising value of Hanwha Q-Cell Korea after PV business realignment with Hanwha Q CELLS whose shares are traded on the NASDAQ. In May, Hanwha Q CELLS handed its Eumseong, Chungbuk site to the Korean entity, allowing Hanwha Q-Cell Korea to control Korean solar cell and production sites.

Hanwha Group is producing 5.2GW cells a year worldwide. Of these, about 30 percent or 1.5GW cells are produced in Korea. Hanwha Group considers expanding the Korean production capacity by 1GW. An official at Hanwha Q-Cell Korea said PV production facilities will be expanded around Korea in the future, which means Hanwha Q-Cell Korea will become the hub in the production of PV cells and modules. Hanwha Q-Cell Korea’s business value will rely on the PV business.

Hanwha Total Petrochemical has been achieving record earnings this year following last year. During the first half alone, the operating profit reached 784.3 billion won ($690.4 million), which is twice more than the annual operating profit entire Hanwha companies made before Hanwha Group’s acquisition of chemical and defense units from Samsung Group. Thanks to the high earnings, Hanwha General Chemical’s dividend payment from Hanwha Total Petrochemical reached as much as 193 billion won at the end of June. Hanwha General Chemical will use the proceeds from the dividend payment to buy additional shares to be issued by Hanwha Q-Cell Korea.

By Chung Wook

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