[Edaily Reporter Shin Ha-yeon ] Daewon Hwasung ( DaewonChemical(024890)), a company specializing in eco-friendly synthetic leather and automotive interior materials, is accelerating its earnings improvement by enhancing its responsiveness to the North American automotive supply chain—centered on its Mexican subsidiary—following efforts to strengthen its financial stability through a revaluation of assets.

DaewonChemical announced on the 30th that it recently conducted a revaluation of the land at its Osan plant, raising the valuation from a book value of 36.2 billion won to 91 billion won. The company explained that this resulted in a revaluation gain of 54.7 billion won and is expected to strengthen its financial structure by bolstering capital and improving its debt-to-equity ratio.

The company views this asset revaluation as more than just an accounting adjustment; it sees it as laying the financial foundation to support the expansion of its global production system.

The company’s Mexican subsidiary is cited as a key driver of this improved performance. DaewonChemical is shifting from a production structure centered on South Korea to a system that links Asian production bases in Vietnam and Indonesia with its Mexican hub, thereby responding to the demand from North American automakers for expanded local production and supply chain stabilization.

Last year, its Mexican subsidiary, KODEC S. DE R.L. DE C.V., recorded sales of 29.9 billion won, a 133.5% increase from the previous year (12.8 billion won). During the same period, the net loss narrowed from 4.7 billion won to 1.4 billion won.

This upward trend continued in the first quarter of this year. Revenue reached approximately 11.4 billion won, and the net loss narrowed to about 180 million won, indicating that the company is approaching the break-even point (BEP).

The company explained that as its Mexico plant began full-scale operations in the second half of last year, it is seeing the benefits of stabilized production and expanded revenue, which are helping to absorb fixed costs. Going forward, the company plans to develop its Mexico subsidiary into a key production hub to support the North American automotive supply chain.

A DaewonChemical official stated, “We have laid the groundwork to strengthen our financial stability through the revaluation of land assets at the Osan plant,” adding, “The Mexican subsidiary is a key hub where the potential for sales growth and improved profitability is gradually being confirmed following the start of full-scale operations.”

The official continued, “As the importance of local production and supply chain stability in the North American automotive market continues to grow, we will enhance our responsiveness to customers and further strengthen the growth foundation of our automotive materials business, centered on our Mexican subsidiary.”