Hanwha scions push for new growth engines

The third generation of South Korea’s family-controlled Hanwha Group has been raising its visibility in management while leading the group’s new growth engines.

The latest move was made by Kim Dong-won, the second son of group chairman Kim Seung-youn, who officially joined Hanwha in 2014. The junior Kim, a digital team leader at Hanwha Life Insurance, has begun to make headway in pushing forward the newly emerging fintech, or finance technology, front.

Last week, Hanwha S&C, the group’s information technology unit, took a major step toward propelling its up-and-coming fintech business by signing a memorandum of understanding with China’s leading peer-to-peer lending platform Dianrong.

The second son Kim Dong-won, who attended the MOU signing event in Seoul last week alongside Hanwha S&C CEO Kim Yong-wook, played an integral part in scoring the cooperative partnership, according to Hanwha Group.

The partnership was initially envisioned after Kim met with Soul Htite, founder and CEO of Dianrong, in April during the LendIt Conference -- the world’s largest online lending event in the U.S. -- and began preliminary discussions on shared interests and potential business ties, the group said.

Under the MOU, Hanwha and Dianrong will set up a joint venture by early 2016 and launch a new P2P marketplace lending service in Korea and Asia, as the two companies aim to expand into more global markets in the near future.

“Kim Dong-won played an important part in exchanging views and continuing discussions with key Dianrong officials,” a Hanwha Group spokesperson told The Korea Herald. Further details regarding Kim’s role and the content of the talks remained undisclosed, as the deal is still in its early stages.

The chairman’s second son, who possesses a 25 percent stake in Hanwha S&C, also actively pushed the company to invest 6 billion won ($5.18 million) into forming a new venture capital fund under its start-up accelerator DreamPlus last year as well.

Previously, it had been eldest son Kim Dong-kwan, the perceived successor to the nation’s ninth-largest conglomerate, who alone stood in the industry spotlight for his managing prowess as chief commercial officer of Hanwha Q Cells, the group’s solar business unit.

First entering Hanwha Group in 2010, Dong-kwan has been at the forefront of the conglomerate’s solar business. He began working at Hanwha SolarOne in 2011 and moved to Hanwha Q Cells -- which was formed after the group purchased Germany-based Q Cells in 2012 -- in 2013. The two units merged in February this year, retaining the latter’s name.

Kim Dong-kwan, who was named CCO of Hanwha Q Cells in March, reportedly led the way in securing major deals with international clients, including a landmark 1.5-gigawatt solar module supply agreement signed in April with U.S.-based NextEra Energy Resources, marking the world’s largest single solar order to date.

Hanwha Q Cells set record-high earnings in the third quarter, posting $472.2 million in net revenue and operating profits of $40.3 million in the July-September period, swinging back to profit for the first time in four years.

Industry watchers predict that the eldest son would most likely take over his father’s position when the time comes, and that the long-term success of the group’s solar power unit would be the key determinant to proving he is capable of controlling Hanwha’s business empire.

At the same time, the emergence of the second son in boosting Hanwha’s fintech business, considered one of the group’s future growth engines alongside solar power, is starting to fuel fresh speculations by some media and business pundits over the impact it will have over the group’s power structure.

“The business involvements of the chairman’s children should be perceived as part of ongoing ‘management training,’ learning about and personally participating in the company’s business operations, rather than a form of potential rivalry or standoff,” said the group’s spokesperson.

Yet, industry insiders expect that the various forms of so-called “management training” are designed as test beds for evaluating each son’s management capabilities, which will affect how the chairman’s assets will be distributed among the three sons in the future.

Meanwhile, the Hanwha chairman’s third and youngest son, Kim Dong-seon, entered the group’s construction unit Hanwha E&C as a manager in October 2014. He has been building up on-site experience at the firm’s major construction sites in the Middle East.

By Sohn Ji-young (jys@heraldcorp.com)