Korean conglomerates tap bio, healthcare for future growth

Korean conglomerates, including retail giant Lotte Group and shipbuilding behemoth Hyundai Heavy Industries, have picked the biotech and healthcare industries as their future growth engines.

Industry attention is on how their business expansion with enormous funding power will affect the bio and healthcare market.

On Wednesday, Korea Biotechnology Industry Organization (Korea BIO) released a report on conglomerates’ plans to enter the biotech industry seen from their shareholders’ meetings in 2022.

Korean conglomerates are eyeing the biotech and healthcare industries as future growth engines.

According to the report, Lotte Group and Hyundai Heavy Industries officially announced that they would begin the biotech and healthcare business at the general shareholders' meetings. However, SK Chemicals said it would go beyond making synthetic drugs and tap biological medicines.

In the shareholdings’ meeting on Friday last week, Lotte Corp. CEO Lee Dong-woo said the company would directly invest in the biotech and healthcare business.

In August last year, the company set up New Growth Team 2 and New Growth Team 3 under the ESG Management Innovation Division to push for the task.

Lotte Corp. plans to spend 70 billion won ($57.5 million) on establishing Lotte Healthcare and building a platform to provide solutions for all areas of health management, including diagnosis and prescription.

For the biotech business, the company seeks to create synergies with an outside company. Lotte Group mulled acquiring a stake in Enzychem Lifesciences in 2021 but did not sign a deal.

On Monday, Hyundai Heavy Industries Holdings (HHI Holdings) changed its name to HD Hyundai at the shareholders' meeting. They disclosed a plan to nurture four future growth areas, including healthcare, and support subsidiaries’ new businesses like white bio.

In 2021, HHI Holdings set up a subsidiary, AMC (Asan Medical Center) Bio, to develop new drugs. Also, the company acquired Mediplus Solution, a mobile healthcare company. In addition, with Mirae Asset Group, HHI Holdings formed a 34 billion-won fund to support startups in digital healthcare and biotech.

SK Chemicals, which operates the synthetic drug business, announced its future business and management plans on March 25.

In the public disclosure, the company said it would spend 600 billion won or more in the pharmaceutical and bio business to reach a sales goal of 1 trillion won in the pharmaceutical and bio sector.

The company’s entry into the new biofield will include gene editing, gene therapy, target protein degradation, and cell therapy.

SK Chemicals’ other major strategies include new drug development via open innovation, development of a new drug discovery platform using AI, investments in promising ventures, and securing pipelines.