South Korea’s Samkwang Glass Co. manufacturer of Glasslock - a household name in glass airtight containers - has become appealing to investors with renewed growth potential from increase in exports and performance of a subsidiary.

The company has recently rationalized its sales channel spread in various routes across offline, online, and telemarketing that cut into profitability. Sales in shops fell sharply because of bargains on online and home shopping channels.

Exports front also turned unfavorable due to slowdown in Chinese economy and loss of its supply contract to U.S. big-box store Costco that took up half of its shipment to the United States.

The company stopped selling through agents in shops and online shopping malls in China and established its own legal entity to market sales directly in the country. The company won contract to supply snapware products to all of 200 Carrefour branches across China and 150 outlets of RT-mart, China’s homegrown big-box chain. It is in separate talks with other big retailers Walmart, Metro and Tesco. “We plan to supply Glasslock products to more than 1,000 hypermarkets in China by the first half of next year and then target the home shopping market in full swing,” said Kwon Jae-yong, an official of the company.

The company has been working to win back the exclusive contract to Costco stores in the U.S. it had lost in 2013 to Pyrex, the glass brand of Corning. It redeemed supply contract in stores in Canada and will likely recover the right in U.S. stores.

The company expects sales to reach 25 billion won ($22 million) in North America and 40 billion won to 50 billion won in China next year.

Its consolidated balance sheet also would benefit from improving earnings from its affiliates. Gunjang Energy that produces steam and power from a thermal power plant in which the parent company owns a combined 39.7 percent stake, has been doing well due to demand in renewable energy. The company posted 65.8 billion won in operating profit last year, translating an income of 14 billion won to Samkwang Glass.

Gunjang Energy started to operate GE4 cogeneration plant with the capacity of 250 mega watts in May. According to Kyobo Securities Co., sales of the company is expected to gradually increase from 254.3 billion won last year to 340 billion won this year and 420 billion won next year. If it keeps up its profit rate, the company can expect an income of 120 billion won next year.

By Noh Hyun

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]