[Edaily Reporter YU JIN-HEE ] “Building on the solid manufacturing infrastructure established through oral care over-the-counter products and the reputation for quality accumulated over the past 20 years, we are now actively expanding our business into high-value-added skincare and medical aesthetics. We are currently proceeding in stages with the certification and licensing of relevant manufacturing facilities, and plan to complete the expansion of our production capacity (CAPA) by 2028, establishing a production system capable of generating up to 90 billion won based on full 24-hour operation.”

Baek Seung-won, CEO of KM Pharmaceutical, made these remarks in a recent interview with Edaily held at the company’s headquarters in Pyeongtaek, Gyeonggi Province. Since its establishment in 2001, KM Pharmaceutical has built a solid foothold in both domestic and international markets as a leading small-to-medium-sized manufacturer, having produced and sold over 100 million products—including “Pororo Toothpaste” for children—in the infant and toddler oral care sector alone. However, over the past four years, the company has experienced a slump in performance due to a combination of soaring raw material prices, research and development (R&D) costs for new products, and marketing expenses incurred to foster its own brand. To overcome this, CEO Baek is spearheading a strong turnaround by prioritizing bold innovations in production infrastructure, expanding global partnerships, and pioneering new businesses such as medical aesthetics.

Pyeongtaek Plant No. 2 Operations Stabilized… Expansion Planned Through 2028 to Build Capacity of Up to 90 Billion Won

The Pyeongtaek facility is at the heart of KM Pharmaceutical’s turnaround strategy. The company operates a dual production line system: Plant No. 1, dedicated to over-the-counter products such as toothpaste and toothbrushes, and Plant No. 2, which mass-produces skincare, body care, and hair care products.

Currently, Plant 1 has already exceeded its maximum operating capacity due to a surge in orders for original equipment manufacturing (OEM) and original design manufacturing (ODM) from major domestic pharmaceutical companies, as well as contracts with global brands. Consequently, the company is pushing forward with facility expansion and process optimization centered on Plant 2, which is located on a spacious site. Currently, the Pyeongtaek plant maintains a monthly production capacity of 2.1 million oral care units, 400,000 cosmetics units, and 1.7 million scalp and hair loss care units.

CEO Baek explained, “With the second plant now fully operational, we have successfully diversified our portfolio from a structure centered on oral care products to include cosmetics and scalp and hair loss care product lines,” adding, “We are seeing clear improvements in productivity, such as a double-digit increase in overall production efficiency compared to the same period last year.”

He continued, “In line with the growing trend of orders from our clients, we plan to complete a phased expansion of our facilities by 2028.” He added, “Once the expansion is complete, production capacity will increase from 50% to a maximum of 150% of the current facility capacity, enabling us to produce products worth 30 billion won annually based on a standard 8-hour operation, and up to 90 billion won based on continuous 24-hour operation.”

In parallel, the company plans to automate the entire production process—from raw material input to filling and packaging—and transition to a smart factory model. This initiative aims to reduce unnecessary downtime and process losses while simultaneously lowering manufacturing costs and enhancing quality stability.

The next-generation core growth pillar that KM Pharmaceutical is preparing for is medical aesthetics. The company’s strategy is to expand into the high-margin medical and cosmetic sectors by integrating precision filling, formulation stabilization, and preservative and microbial control technologies—all of which have been proven in the manufacture of existing quasi-drugs and cosmetics.

CEO Baek stated, “We are methodically proceeding step by step with the facility certification and licensing procedures required for the expansion of our aesthetic business.” He added, “While we have already completed thorough certification for our flagship product lines to ensure smooth global exports and shipments, medical aesthetics is a highly specialized field involving direct application to the human body; therefore, we are meticulously preparing the mass production facility setup and the advancement of our quality management system.”

The company’s global competitiveness is also being proven. KM Pharmaceutical has maintained its certification for eight consecutive years since receiving a cGMP (Current Good Manufacturing Practice) compliance determination from the U.S. Food and Drug Administration (FDA) for its manufacturing processes in 2018. The company recently successfully renewed its relevant registrations, further strengthening its competitiveness in exports to the U.S. over-the-counter (OTC) market. This is directly translating into successful collaborations with global companies with a century-long history. KM Pharmaceutical is jointly developing and supplying two types of fluoride toothpaste for children with Weleda, a Swiss natural and organic pharmaceutical and cosmetics company.

CEO Baek stated, “Cumulative production revenue from our collaboration with the global company Weleda recently surpassed 7 billion won, and order volumes have risen sharply by more than 40% compared to the previous year.” He added, “We have proven our technical capabilities by fully passing the rigorous European-style quality audit, and based on this, discussions regarding the launch of overseas branches and global local distribution networks are proceeding smoothly.”

In-house Brand ‘Zerocipe’ Sailing Smoothly Globally… “Achieving the 100 Billion Club to Establish a Virtuous Cycle”

Improvements in profitability through the cultivation of its own brand (OBM) are also becoming evident. “Zerocipe,” a high-performance hair and scalp care brand utilizing patented nanographene material, has signed an exclusive contract in Thailand and is now pursuing joint development with a local UK company. Having expanded its lineup to include skincare products, Zerocipe is also preparing to enter the Japanese market. “FOAMGLE,” a foam-type mouthwash now available on Amazon U.S., has also demonstrated K-Oral Care’s potential, with average quarterly sales surging 65% since its launch.

CEO Baek emphasized, “The operating losses we’ve experienced since 2022 were due to a temporary concentration of R&D investments and brand marketing expenses aimed at future growth,” adding, “We will raise annual revenue—which stood at 16 billion won last year—to over 20 billion won this year to lay the foundation for a profitable business structure.”

In fact, the company laid the groundwork for a rebound in the first half of this year by posting revenue of 8.3 billion won, a 13.4% increase compared to the same period last year. With the onset of the peak season in the second half of the year, coupled with the supply of skincare products and expanded exports, the company is expected to easily achieve its annual targets. Furthermore, KM Pharmaceutical is securing financial soundness through asset restructuring—such as the sale of its Seoul headquarters—and is making every effort to enhance corporate value by implementing share buybacks and a stock split.

CEO Baek stated, “After achieving our first-stage goal of 50 billion won in annual revenue by 2028, our ultimate objective is to join the 100 billion won annual revenue club in the medium to long term,” adding, “We must reach a scale of 100 billion won in annual revenue to be recognized for our unrivaled brand value in the market and generate stable operating profits.”