Temporary Suspension of 'Ferroalloy Business' Accounting for 29% of Sales... "Aimed at Improving Profitability"

DB Group affiliate DB World (CEO Yoon Soon-kyun) announced on the 29th that it will temporarily suspend the operations of its 'Ferroalloy Division,' which accounts for approximately 30% of its total sales. This is a bold business restructuring carried out just one year after it began improving its corporate fundamentals to become a comprehensive enterprise through active mergers and acquisitions (M&A).

According to the public disclosure, the suspended business amount for DB World is 40,064.37 million won, which corresponds to 28.9% of its most recent total sales (138,743.63 million won) based on last year's consolidated financial statements. The scheduled date for the suspension of operations is September 30, 2026.

The reason for the suspension stated by the company is "the recession in the related steel industry and the continuation of accumulated deficits."

Established in 1989 and primarily focused on operating the prestigious public golf course 'Rainbow Hills CC' and the real estate business, DB World underwent a massive change in 2024 when it welcomed DB HiTek (73.89% stake) as its largest shareholder. In particular, by absorbing and merging DB Metal in July of last year, it added the 'Ferroalloy Business'—famous for its history of producing Korea's first ferrosilicon—and the 'Construction Business' to its portfolio.

However, as the accumulated deficits in the ferroalloy division worsened due to the prolonged stagnation in the steel market following the merger, it is interpreted that the board of directors ultimately made the resolute decision of a 'temporary suspension of operations' through a resolution.

An official from DB World explained, "By temporarily suspending the loss-making business division, we expect to improve our financial structure by reducing fixed costs and improving profitability and cash flow," adding, "A short-term decrease in sales is inevitable, but it will serve as an opportunity to strengthen internal stability company-wide."

In fact, DB World is supported by the 'Construction Business Division' (maintenance, new construction, and expansion of parent company DB HiTek's semiconductor plants, etc.), which became its largest business accounting for 52.5% (about 72.8 billion won) of sales through the merger last year, and the newly acquired 'Railway Track Business Division'. Therefore, if the deficit is reduced through this restructuring, internal management is expected to accelerate further.

Meanwhile, the date of this business suspension is the sales end date based on the depletion of remaining inventory such as raw materials and products, and the schedule is subject to change depending on future business plans.