[SUPER RICH] AmorePacific chief emerges as billionaire icon

The stock market has played an instrumental role in creating the wealth of most South Korean billionaires.

Suh Kyung-bae, 51, chairman of South Korean cosmetics-maker AmorePacific Group, is one such business tycoon who joined the big leagues of wealth thanks to a dramatic upturn in his stock values.

Last week, the stock price of AmorePacific, the nation’s top cosmetics manufacturer, surpassed the 2.5 million won ($2,375) mark for the first time in its history, making Suh the second-wealthiest man in the country.

He is now officially the richest man after Lee Kun-hee, the head of Samsung Group.

The combined value of Suh’s shareholdings reached 7.13 trillion won as of last Thursday, reflecting a 119 percent jump from the 6 trillion won tallied in August, and a 238 percent increase from the 3 trillion won recorded previously.

Analysts say this is only the beginning for AmorePacific -- once a camellia oil-selling mom-and-pop store -- predicting that the company will become the next iconic chaebol after Samsung.


Success in China

They noted that AmorePacific’s sprawling beauty business received a significant leg up from the widespread popularity of Korean pop culture, helping boost the sales of skincare products, particularly in China.

According to the firm, sales in China are expected to account for about 70 percent of its total overseas sales in the fourth quarter.

AmorePacific first entered China in 1992 by setting up a Shanghai unit.

In 2002, the cosmetics-maker built a manufacturing plant there, only to struggle with a decade of deficits.

It has only been two years since the company began seeing a sales surplus. Its five major subbrands targeting upper-class Chinese are Laneige, Mamonde, Sulwhasoo, Innisfree and Etude House, and these brands are building their reputations at a fast pace.

Next month, it is also planning to introduce a high-end skincare brand named after the group.

AmorePacific is now aiming to boost its Chinese sales to 3 trillion won by 2020 to account for nearly 28 percent of total sales. Currently, the proportion is 10 percent.

The chairman stresses that the firm has been able to capitalize on the soaring demand in China not through luck or solely due to the Korean Wave, but through decades of hard work combined with perfect timing.

“I’m very happy that the Hallyu phenomenon is still going big and I hope it stays popular,” Suh said during last week’s press conference in China. “But the Hallyu wave swept upon us only recently during the past 22 years we have spent investing in China’s cosmetics business.”


Handing down the business

Given the rising value of Suh’s stocks and a shift in his family’s stockholdings, speculation is now mounting that the chairman will pass the business on to his daughter Min-jung.

Suh’s wife Shin Yoon-kyung is the youngest daughter of food giant Nongshim Group chairman Shin Choon-ho.

Min-jung, their eldest child, is 23 and currently studying management in the U.S. As the second-largest shareholder of AmorePacific, she currently owns 26.48 percent of the group’s stock, worth 1.3 trillion won.

When asked how the succession would be handled, the chairman has been denying the rumors, saying that despite his graying hair, he is still young. “My children are still in school and I have not thought about my succession plan yet,” he recently said.

By Suk Gee-hyun (monicasuk@heraldcorp.com)