Korean Founder Of Little-Known Sneaker Foam Maker Becomes A Billionaire After Jumping Into EV Batteries

Shares of a little-known sneaker foam maker in South Korea have doubled so far this month on the back of strong investor demand for electric vehicle-related stocks like Tesla and Rivian, making its CEO, Ryu Kwang-ji, a billionaire.

Ryu, who turned 57 in May, is the largest shareholder of Kumyang, which is listed on South Korea’s technology-rich Kosdaq stock exchange. He owns nearly 40% of the almost $5 billion (market cap) company in his own name, but has pledged almost 90% of his stake as collateral for personal loans; Forbes applies a discount to his pledged shares to account for the loans. Forbes estimates Ryu’s net worth at just over $1 billion as of Tuesday’s close.

After years of toiling in obscurity, Kumyang’s shares started rising in mid-2022, when the company completed research into developing rechargeable lithium batteries used for electric vehicles and electronic devices. Kumyang “acquired excellent results in electrical characteristics evaluation and safety evaluation by authorized testing and certification bodies,” the company claimed in its half-year report last year. Since then, Kumyang shares have jumped almost 2,000% as investors chasing battery stocks poured into the company. Late last year, Kumyang said it would invest up to $19 million in a lithium mining project in the Congo, which is the world’s largest producer of cobalt, another key metal for EV batteries.

To be sure, Kumyang has a long way to go to prove itself in the competitive EV battery field. Based in South Korea’s southeastern port city of Busan, Kumyang makes almost all of its money from making blowing agents that are used to produce plastic foam. The foams are used to make sneakers, foam mats, artificial leather, door panels and other consumer products. For the first quarter this year, Kumyang swung to a loss of 2.7 billion won ($2 million) after reporting a profit of 2.3 billion won a year earlier. Its revenue came in at 38 billion won, a decline of 30% from a year earlier.

Ryu joined Kumyang in 1998 as a finance manager and took over as CEO three years later. Born in Gunwi, a rural county southeast of Seoul, Ryu earned a law degree from Korea University, one of the country’s leading universities. Before joining Kumyang, he worked at Seoul Securities (now called Eugene Investment & Securities), a brokerage firm once controlled by billionaire George Soros.

Earlier this year, another Korean chemicals company produced a billionaire on the back of surging demand for EV batteries. Lee Dong-chae, founder of chemicals group Ecopro, joined the three-comma club after shares of his company surged almost 800% this year. One of EcoPro’s subsidiaries, EcoPro BM, is South Korea’s largest producer of cathodes for electric car batteries.

In 2021, another Korean chemicals company produced a billionaire amid growing excitement for EVs. Lee Sang-ryul, founder of Kosdaq-listed Chunbo, reached billionaire status after shares of the company, which makes chemicals for lithium-ion batteries, rose nearly 40% in the first nine months of 2021. But he lost his billionaire status this year as Chunbo’s shares have almost halved from their peak in November 2021.

South Korea is home to some of the biggest companies in the EV battery industry. About a quarter of the world’s EV batteries are made by three of the country’s largest family-run conglomerates: Jay Y. Lee’s Samsung, Koo Kwang-mo’s LG and Chey Tae-won’s SK.

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