Kumho Petrochemical has reportedly been named as the preferred buyer for Kumho Resort, outbidding rivals like Line Construction and Consus Asset Management.

An official at Kumho Petrochemical said that the acquisition of Kumho Resort was “primarily to diversify our business portfolio” to include leisure and resort services, rather than to create synergies with existing operations.

Most of Kumho Petrochemical’s revenue comes from synthetic rubber and resin products, with fine chemicals and construction materials also included in its business portfolio. The petrochemical sector is relatively sensitive to economic cycles and customer demand is affected by seasonal trends.

Heightened economic uncertainty also has made the company more vulnerable to external shocks, such as the Covid-19 pandemic and U.S.-China trade tensions.

Demand for NB latex, the company’s key product that is used to make rubber gloves for medical purposes, soared last year due to the impact of the pandemic. However, revenue from synthetic rubber products used in tire manufacturing declined as the pandemic crippled the automotive and tire industries.

Kumho Resort is expected to benefit from pent-up demand for travel after the pandemic resides. It consists of Asiana Country Club, a 36-hole golf course in Gyeonggi Province, near Seoul, four resorts and a water park.

The company also owns a 46.7% stake in Hong Kong-based Kumho Holdings, which operates a golf resort in Shandong, China. (Reporting by Su-jin Yoo)