Hanwha Group, South Korea’s seventh-largest conglomerate, is looking to bolster its robotics business as it plans to establish a new robotics corporation.

Hanwha announced Friday that its robot and automated guided vehicle businesses under the factory automation department at Hanwha Corporation/Momentum would be split off into a new robotics firm named Hanwha Robotics. The company said the split-off is taking place to sharpen each business’ expertise.

“Through the establishment of this new corporation, Hanwha Corporation will increase its corporate value by achieving both external growth and profit generation in the mid- to long-term as (Hanwha Momentum) will focus on its core businesses of the secondary battery and solar power systems while the businesses of collaborative robots and automated guided vehicles will be run at a split-off firm,” said a Hanwha official.

According to Hanwha’s regulatory filing on Friday, Hanwha Corporation/Momentum and Hanwha Hotels & Resorts will set up a joint venture for Hanwha Robotics and hold 68 percent and 32 percent of the new company’s shares, respectively.

Hanwha Corporation/Momentum will acquire 28,293,195 shares of Hanwha Robotics, which are valued at about 42.4 billion won ($31.8 million).

Hanwha Robotics is expected to be established on Oct. 6 as Hanwha Corporation/Momentum is scheduled to acquire the shares on that day.

Hanwha said the new robotics firm will aim to become a global leader in robotics solutions based on smart technology. For the collaborative robot business, it plans to expand its product lineup to service applications from the currently industry-centered robots. The company said it will focus on the customers of industrial robots based on welding and machine tending solutions in the short term while looking to expand into the areas of food technology, building management and electric vehicle charging in the mid- to long-term.

According to Hanwha, the robotics business is projected to grow rapidly due to worforce shortages and rising labor costs across the globe. Korea’s robotics market is expected to reach 550 billion won in 2027 from 130 billion won this year. The global robotics market is forecast to grow to 8.5 trillion won in 2027 from 2 trillion won this year.

“The establishment of Hanwha Robotics signals (Hanwha Group’s) will to take a more aggressive approach to the robotics business, which has been preoccupied with other conglomerates such as Doosan and HD Hyundai,” said an official at a robotics company.

“With major companies leading the robotics business, related markets will grow consequently and Hanwha will have to find its niche.”