[Edaily Marketin Song Seung-Hyeon Reporter] Amid growing interest in Korean cuisine driven by the “K-Food” craze, domestic private equity funds (PEFs) are also actively pursuing acquisitions. In particular, as global consumption of “kim” (seaweed)—once considered a food unique to Korea—has increased, some private equity funds have been acquiring related businesses one after another. UCK Partners, which established itself as a leading example of a successful “value-up” case in the PEF industry through its investment in Gongcha, is at the forefront of this trend.

According to the investment banking (IB) industry on the 29th, UCK Partners acquired a 49.9% stake in “Haenong,” a seaweed manufacturer previously held by Gravity PE and Otium Capital, for approximately 30 billion won last February, becoming the second-largest shareholder. Haenong, established in 2018, is a B2B-focused company that has vertically integrated its operations—from purchasing fresh seaweed to producing dried seaweed and processing seasoned seaweed—and operates the Mokpo Marine Campus (annual capacity of 3 million bundles) and the Naju Innovation Campus (annual capacity of 5 million bundles).

In addition, last May, the firm acquired Manjeon Foods, another seaweed manufacturer. At that time, UCK Partners acquired an 80% stake held by Kamur PE for approximately 210 billion won. Manjeon Foods is considered a key driver of expansion in the “seaweed business” because it has not only achieved vertical integration—from raw material procurement to processing and distribution—but also established an overseas sales network. Industry observers predict that UCK Partners will increase its market share in the seaweed industry through a sustained bolt-on strategy going forward.

Even before UCK Partners, there were private equity funds that achieved successful exits through the seaweed business. Aperma Capital acquired Sungkyung Foods for approximately 151 billion won in late 2017 and sold its 100% stake to the Samchully Group last December for 119,480,890,000 won. While the sale price alone was lower than the acquisition cost, it is estimated that the fund recovered approximately twice its principal when factoring in dividends earned during the holding period and the capital gain from the separate sale of Gaemi Foods—a bolt-on acquisition made in 2020.

It is presumed that private equity funds are showing interest in the domestic seaweed business due to its high potential for overseas expansion. Last year, seaweed exports reached a record high of $1,133,520,000. According to data from the Ministry of Oceans and Fisheries, exports have grown at a double-digit rate annually, rising from $792,540,000 in 2023 to $997,020,000 in 2024. Last year, seaweed alone accounted for about one-third of the total seafood exports of $3.33 billion, and according to the Korea Customs Service, it ranked second only to ramen among all K-Food items. The number of export destinations increased from 64 countries in 2010 to 124 in 2023, and Korean seaweed holds a market share of over 70% in the global seaweed market.

By country, the United States was the largest market last year at $220 million, followed by Japan at $210 million and China at $100 million. In December of last year, the United States waived the 15% tariff previously imposed on Korean-made seasoned seaweed. Seasoned seaweed accounts for more than 90% of seaweed exports to the U.S. Last year, the increase in export value outpaced the increase in volume, a result of the growing share of high-value-added processed products—such as seasoned seaweed and seaweed snacks—compared to raw dried seaweed. This indicates that the export structure is shifting toward higher-priced processed products while reducing reliance on any single market.

In its plan to strengthen the competitiveness of the seaweed industry, the Ministry of Oceans and Fisheries noted that the processing sector consists largely of small and micro-enterprises, making it necessary to achieve economies of scale. The industry is characterized by a large number of regionally based, family-run businesses. In an industry where raw material prices are highly volatile, increasing the scale of procurement serves as a means of cost management. UCK Partners’ strategy of using companies with established brands and overseas sales networks as platforms, while successively integrating companies with production capabilities, is seen as a calculated move to secure both purchasing power and production capacity in a fragmented industry.

An official in the private equity fund (PEF) industry stated, “The seaweed sector had long been overlooked by the capital markets, but as export performance began to take off, it started to be viewed in an entirely different light.” The official added, “For Gwangcheon Kim, the industry leader, the sellers’ expectations have risen to the point where, rather than lowering the price after failing to secure the expected sale price, they are now weighing the option of an IPO.”