Tycoons outline New Year plans

  Samsung chairman pledges investment, mutual growth

Samsung Electronics chairman Lee Kun-hee reiterated his commitment to aggressive investment and mutual growth with suppliers in his New Year address Monday. 
    

In a speech at a ceremony with about 1,200 executives in Seoul, Lee emphasized the importance of future growth engine businesses.

“Ten years from now will be the challenge period to move forward in the next 100 years,” he said. “Samsung shall aim at a company that leads the 21st century and grows without teetering, and all of whose employees give themselves to their work without anxiety.”

To nail down the goal, the company’s business structure should have a virtuous cycle and most of Samsung’s representative businesses and products will have to be replaced by new ones within 10 years, Lee said.

“There will be more, large investment this year,” he also told reporters prior to the event.

Samsung has been increasingly focusing on how the group would tackle future challenges although its flagship electronics arm has enjoyed success in the past year.

Samsung is the world’s top memory chipmaker and the second-biggest mobile phone producer.

Industrial experts forecast difficulties for electronics companies on account of waning prices and demand for this year.

The conglomerate announced a plan in May to inject some 23 trillion won ($20.5 billion) over the next decade into new areas of businesses ― solar batteries, car batteries, light-emitting diode, bio-pharmaceutical and medical equipment.

Lee revived a future strategy unit at Samsung Electronics late last year to master the ambitious plan.

The electronics titan applied to develop biosimilar medicines for curing leukemia or rheumatoid arthritis, the Korea Food and Drug Administration said in December.

Samsung also signed a deal to purchase a stake in an ultrasound manufacturer that month.

Lee at the event promised further efforts to promote mutual growth with subcontractors, a key measure to “boost Samsung’s brand value.”

“President spoke of mutual growth between large enterprises and small- and medium-sized businesses, I’ve clamored for that since a long time ago,” he said.

“It is not just for conglomerates, but a basis of Korean economy. It virtually helps major companies.”

President Lee Myung-bak last year called on the country’s business tycoons to join efforts to build a fairer corporate ecosystem as part of his “fair society” campaign.

Samsung’s Lee has consistently been emphasizing solid partnerships with its “partners,” pushing executives to devise special measures and action plans to reach the goal.

Samsung Electronics signed a memorandum of understanding with the Industrial Bank of Korea in September to create a mutual growth fund of 1 trillion won.

“Donation and public service hold up society. We should warm up and make our society healthy by making donation and providing services that optimize our knowledge and know-how,” Lee said.

By Shin Hyon-hee (heeshin@heraldcorp.com)


Hyundai Motor Group eyes 6.33 million car sales

Hyundai Motor Group will target 6.33 million unit annual sales and increase investment in developing eco-friendly automotive technologies this year, its chairman Chung Mong-koo said in his New Year speech Monday.

The target is an increase of about 10 percent from last year’s figure of 5.75 million units recorded by the group’s carmakers ― Hyundai Motor Co. and Kia Motors Corp. ― in 2010.

Aided by record sales in some of the world’s largest markets including China and the U.S., the group’s two carmakers raised sales figures by 24 percent from 2009 overshooting the target of 5.4 million units by about 6.5 percent.

As the group sets its sights higher, “securing core capabilities for growth in the future” will be this year’s main objective for the year, the company said.

“In order to obtain the 6.33 million unit sales target, a close cooperative system among manufacturing and sales headquarters located in various countries need to be established to respond actively to rapidly changing business environment,” Chung said. He added that a “creative global corporate culture” will be implemented in all areas of the group’s operations.

“(The group) Needs to strengthen quality management to repay the customers, and secure core technologies and competitive edge by increasing research and development investment for eco-friendly vehicles.”

Chung also said that Hyundai Steel will build another blast furnace with an annual production capacity of 4 million metric tons this year, and that he expects automotive plates produced at the plant will further improve the quality of the group’s automobiles.

Following the completion of the new furnace, the capacity of the company’s integrated steelworks in Dangjin, South Chungcheong Province will be raised to 12 million tons.

“The world market is changing very rapidly, and companies that do not answer to such changes are going from yesterday’s winners to today’s losers,” Chung said.

“Creative changes and taking on challenges is the only strategy for survival.”

By Choi He-suk  (cheesuk@heraldcorp.com)


SK to invest W17tr in new growth engines

SK Group said Monday it plans to inject over 17 trillion won ($15 billion) in new growth engine businesses over the next 10 years. 

Aiming to foster sustainable growth, SK chairman Chey Tae-won emphasized “human resources,” “corporate culture” and “business model” as three key phrases for 2011.

“Human resources are those who confront the ever-changing business environment. By innovating our human resources and corporate culture, I think we can create more happiness and pursue sustainable growth,” Choi said in his New Year’s speech.

Under the vision, SK Group will invest 17.5 trillion won by 2020, 1.7 trillion of which will be invested this year, to three of its core business sectors.

They are securing new energy resources, forging a “smart” environment and developing innovative technologies.

In its energy sector, the group will make major investments in clean coal, marine bio-fuel, solar batteries and hydrogen fuel cells.

The 4G telecommunications technology, cloud computing and smart grids are the focuses of SK Telecom and SK C&C, according to the group.

Developing medicines for cerebrospinal and metabolic diseases will be the aim of SK Holdings’ life science business and SK Chemical this year, the group said.

SK will at the same time boost its efforts to broaden its overseas markets to emerging markets in the Middle East, South America and Southeast Asia, it said.

The businesses in South America will especially focus on developing resources including liquefied natural gas, crude oil and natural gas, it said.

SK meanwhile said it will continue seeking expansion in the Chinese market, looking for fresh business opportunities in renewable energy, petrochemistry and urban development in the highly prospective market

The group established SK China, the group’s Chinese branch in July.

By Koh Young-aah (youngaah@heraldcorp.com)


LG chairman stresses preemptive investment

LG Group chairman Koo Bon-moo called for drastic reforms of the nation’s fourth-largest business group to preemptively lead the market and prepare for future growth.

   
“In this rapidly changing business environment and increasingly fierce competition, moving ahead of the market is not a matter of choice but a path that we have to take,” Koo said in a New Year message.

“If we fail to lead the market with a right direction and thorough implementation, it will be difficult to maintain our current standing, let alone take a new leap.”

He made the address in a ceremony attended by about 300 top executives from LG Electronics, LG Chem, LG Display, LG Uplus and other affiliates.

LG Group had very mixed results in 2010. Its chemicals and display units registered sharp sales growth, while its electronics and telecom concerns lagged far behind their competitors.

He praised the group’s foresight in long-term investment in research and development that bore fruit to create values and broaden their customer base.

But he warned that last year also provided a painful lesson that complacency leads to failure.

He presented three key principles: creation of customer values, preparation for the future and a culture of self-leadership.

He emphasized the need to increase investment in R&D and nurture competitive human resources.

LG Group aims to increase its combined sales revenue by 11 percent to 156 trillion won ($139 billion) this year by strengthening its electronics and chemicals businesses. The group posted an estimated 141 trillion won in sales in 2010.

It expects more than three-quarter of its sales would be generated from its overseas businesses.

It aims to boost revenue from electronics arms 13 percent to 97.3 trillion won. Its chemicals operations are expected to post 27.3 trillion won in sales, up 7 percent from 2010.

LG Group plans to scale up its investment 12 percent this year to a record 21 trillion won, including 4.7 trillion won in research and development. Its investment stood at 18.8 trillion won in 2010.

By Shin Hyon-hee (heeshin@heraldcorp.com)


POSCO aims at W200tr sales by 2020

POSCO chief executive Chung Joon-yang announced Monday that the company and its affiliates will aim to raise their combined sales figure to 200 trillion won ($178 billion) in 2020 under the Vision 2020 plan.

For last year the company estimates a combined sales figure of 58.8 trillion won.

Under the plan, 120 trillion won will be raised from POSCO and subsidiaries’ established businesses in steel and nonferrous metals, while 60 trillion won will be generated from rapidly growing businesses such as energy, chemicals and construction.

The remaining 20 trillion won will be generated from the new businesses POSCO is developing, including those concerning green growth, the company said.

As part of the plan, Chung said that the company will also expand its operations to previously untapped regions including Africa and Siberia with the focus on resource development.

As for the year ahead, Chung said that it is the first year in the progress towards achieving Vision 2020 and the company will make preparations for the era of “knowledge productivity.”

He said that the company will promote training innovative and educated workers, strengthening competitiveness and ethical management practices, and introducing “smart management” in 2011 in preparation for the era of “knowledge productivity.”

Chung also said that as “knowledge workers” form the basis of the era of knowledge productivity, the company will establish a knowledge-based working environment and train employees who are able to compete on the global stage.

In the speech Chung presented “and” as the key word for the company in 2011, saying that the company should not choose management or technology, but choose a path that combines management and technology. He also said that the word and should be applied to defending its domestic market share and expanding its presence in the global market.

By Choi He-suk  (cheesuk@heraldcorp.com)


GS head focuses on innovation

GS Group chairman Huh Chang-soo stressed “innovation” and mutual growth with subcontractors for the new year on Monday. 

“The era of a creative world is opening and we consequently have to upgrade our businesses to catch up with such a trend. To do so, I think we have to change ourselves first,” Huh said in a CEOs’ meeting.

Under the plan, Huh said the group should step up its efforts to look for new growth engine businesses through which it can hold an original competitiveness. The chairman has continuously been emphasizing the significance of novel businesses and specialty.

GS group’s key affiliates are gearing up to accomplish the chairman’s aspirations, according to GS Group.

GS Caltex chairman Huh Dong-soo said the firm will seek sustainable growth by strategically preparing for the future amid the fast-changing business environment.

“We will continue to keep our competitiveness and profitability in the industry while actively pursuing new businesses and executing a creative management,” Huh Dong-soo said.

GS Caltex, Korea’s No. 2 oil refiner, said it is aiming to raise the efficiency of its facilities including heavy oil upgrading facilities to maximize profits while more aggressively expanding its overseas markets.

It will also reinforce its research and development for secondary batteries which are expected to be widely used for electric cars.

GS E&C will also reinforce its foreign businesses and seek new business opportunities, particularly in civil engineering, the firm said.

Huh, meanwhile, also discussed the importance of co-prosperity between the group and its competitors and suppliers.

He urged the GS CEOs to pursue a more productive rivalry with them, which can help boost their creativity for the development of more advanced business models.

By Koh Young-aah (youngaah@heraldcorp.com)