At Kolmar Korea’s cosmetics factory in Sejong City on June 17 at 10 a.m., nine large one-ton manufacturing units, labeled with codes like MNF-○○○○ and GML-□□□□, were hard at work. These codes denote client companies and product names, indicating the production of various items such as M Corporation’s sunscreen, G Corporation’s lotion, and A Corporation’s eye cream. A worker manufacturing pink sun lotion explained, “While it may seem like a simple task of mixing ingredients, improper manufacturing can lead to separation or viscosity issues, compromising quality,” adding, “Each product involves 30 to 40 different ingredients, and every step—from the mixing ratio to the order, speed, and temperature—requires precise technology.”
The factory, covering approximately 40,000 square meters (about two soccer fields), produces 450 million units of basic cosmetics annually for around 900 domestic and international clients, generating 700 billion won in sales. The facility operates 33 manufacturing units and 11 packaging lines at full capacity, producing products for global brands like L’Oréal, Estée Lauder, Armani, and Kiehl’s, which are then exported worldwide. “Made in Korea” products from this factory are sold at major beauty destinations like Charles de Gaulle Airport duty-free shops in France, Harrods in London, and Omotesando in Tokyo, earning Kolmar Korea the nickname “TSMC of the cosmetics industry.”
Kolmar Korea, like TSMC in the semiconductor industry, operates as a foundry, focusing on production based on client orders without its own brand. Known as an original design manufacturer (ODM), the company specializes in researching, developing, and producing cosmetics. Among the top three global ODM leaders in the cosmetics industry are Kolmar Korea, Cosmax, and Intercos (Italy), with two of these based in South Korea. Despite other global ODM counterparts transforming into comprehensive cosmetic firms by launching their own brands, Kolmar Korea and Cosmax have remained dedicated to ODM to maintain customer trust, avoiding competition with their clients.
These ODM companies invest 5-7% of their total sales into R&D, developing unique technologies to meet diverse client demands. Kolmar Korea and Cosmax conduct extensive research on various skin types and nationalities, amassing a vast database from years of manufacturing for over 1,000 clients each.
This expertise has led to a surge in global client inquiries. Kolmar Korea secured 253 new contracts last year, a 48.8% increase from the previous year. Cosmax also anticipates adding over 300 new clients this year. In response to global demand, Cosmax established Cosmax Japan in 2022 and is expanding into the Middle East, India, Africa, and South America.
The two ODM companies have significantly contributed to the export success of “K-beauty” products. Even lesser-known or new Korean cosmetic brands like Beauty of Joseon and d’Alba achieve impressive export results thanks to the technological prowess and production capacity of ODM companies. The export of Korean cosmetics by small and medium-sized enterprises surged by 30.1% to $1.55 billion (about 2 trillion won) in the first quarter of this year, marking a record high for the period. The diversity of export destinations has also expanded, with notable increases in exports to the United States (60.5%) and Japan (18.3%).
