[Edaily Marketin, Reporter Lee Geon-eom] As Kolmar Group accelerates its restructuring to clearly separate the business areas of its affiliates into cosmetics and health functional foods, the agreement to transfer the toothpaste business between #Kolmar Korea and its affiliate HNG has been abruptly canceled. While the company is continuing its broad “selection and concentration” strategy, it appears to be adjusting the pace and making strategic revisions regarding certain business transfers following an internal reevaluation.

According to a comprehensive review of the Financial Supervisory Service’s electronic disclosure system and E-Daily’s reporting on the 11th, Kolmar Korea abruptly terminated the comprehensive transfer agreement for its toothpaste business division, which had been signed with its subsidiary HNG, by mutual agreement on April 2. As a result of this decision, the division—which has produced toothpaste brands such as Atomy—will remain within Kolmar Korea as before.

Originally, the two companies held a board meeting on March 6 and signed an agreement to transfer Kolmar Korea’s entire toothpaste business division to H&N for approximately 15 billion won. However, with the contract being terminated ahead of the transfer date of April 13, the business transfer between the two companies ultimately fell through.

H&N is a mid-sized company specializing in the manufacturing (ODM/OEM) of health functional foods and quasi-drugs. Recently, it transferred its cosmetics business division to Kolmar Korea and is solidifying its position as a specialized production base focused on health functional foods.

It has been determined that there are no amounts to be settled or returned between the two companies in connection with this contract termination. Kolmar Korea is not considering selling its toothpaste business to an external party, so it is expected to remain under the current structure for the time being.

This transfer of the toothpaste business aligns with the broader strategy of restructuring the Kolmar Group’s business operations, which has been in full swing under Vice Chairman Yoon Sang-hyun. The core of this strategy is to unify the company’s identity—with Kolmar Korea handling cosmetics and Kolmar B&H handling health functional foods—to maximize management efficiency.

In fact, during the first quarter of this year, Kolmar B&H successfully completed a “cosmetics spin-off” worth approximately 40 billion won by transferring its entire stake in Kolmask, a subsidiary specializing in cosmetics manufacturing, and the cosmetics division of H&NG to Kolmar Korea and Kolmar UX, respectively. The transfer of the toothpaste business was also carried out as part of a business portfolio exchange between the two companies.

The market views the withdrawal of the toothpaste business transfer—despite the smooth completion of the massive restructuring involving the separation of Kolmar Korea’s cosmetics and health food businesses—as a result of pragmatic calculations. Analysts suggest that the companies prioritized the “practical benefits” of production efficiency over a physical division of business units between the two firms.

In particular, toothpaste is classified as a quasi-drug, making it difficult to clearly categorize it under either cosmetics or health foods. Rather than forcibly separating it into H&N, management likely reassessed that it would be better to operate it in conjunction with the personal care value chain (production facilities and workforce) already established within Kolmar Korea, as this would help maintain cost competitiveness and prevent duplicate investments.

Although the acquisition of the toothpaste business fell through, the Kolmar Group’s overall restructuring of its governance and its focus on core businesses are expected to remain unchanged. With the reorganization of major cosmetics and health food subsidiaries largely complete, it is anticipated that Kolmar Korea will enhance its global competitiveness based on a unified beauty business, while Kolmar B&A, having secured funding, will devote its resources to improving the performance of its core health food business.

In this regard, a Kolmar Korea official explained, “We are reviewing various measures to ensure the stable operation of the toothpaste business and improve its efficiency.”