CJ Group’s food business unit and Metabolix have signed a binding letter of intent for the given transaction, which will be fully implemented by mid-September, the companies said.
|CJ Group employees walk alongside the group’s headquarters in Seoul.|
Under the agreement, CJ will secure the US firm’s research and development lab in Boston, Massachusetts and take over the patent rights covering the production and usage of polyhydroxyalkanoate biopolymers.
In doing so, the Korean food company aims to go beyond its traditional strongholds in food biotech and newly jump into the industrial biotechnology, or “white biotechnology” field — utilizing living cells and enzymes to create environmentally-friendly industrial materials such as biodegradable plastics.
“In addition to securing leadership in the global green bio business, we have now gained a foothold in expanding our R&D capabilities to enter the industrial biomaterials sector,” vice president of CJ CheilJedang’s biotechnology business Roh Hang-duk said in a statement.
The recent acquisition comes as the Korean food company aims to nurture its biotechnology business as the main driver of its future growth and looks beyond its main food business based in saturated domestic markets.
CJ CheilJedang’s biotech business — which took up around 20 percent of the company’s total revenue in 2015 — is mainly focused on producing food and animal feed additives made from biological fermentation.
It is currently the world’s largest producer of lysine, an amino acid used as additives for animal feed, as well as food additives including nucleotides and tryptophan.
And CJ is bent on pursuing new mergers and acquisitions to further expand its biotech business — a process set to receive a boost upon the return of the group’s ailing chairman Lee Jay-hyun, who was freed of his 2 1/2 year jail term through a presidential pardon last week.
Back in January, CJ CheilJedang had sought to take over China’s MeiHua Holdings Group, the country’s top seller of monosodium glutamate and other amino acids — though unsuccessfully.
In March, the Korean food company acquired a 100 percent stake in China’s advanced amino acid producer Ningbo Zhenhai Haide Biochem Co. for 36 billion won (32.2 million), expanding its food biotech business portfolio.
“Though there are not any M&As under discussion at the moment, we will continue to expand our biotechnology business,” Sohn Kyung-sik, who has been serving as CJ Group chairman in Lee’s absence,” told reporters on Aug. 11.
By Sohn Ji-young/The Korea Herald (email@example.com)