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| TITLE |
50 years of tenacious growth |
| WRITER |
administrator |
DATE |
2009-11-17 09:44:44 |
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50 years of tenacious growth
[The faces inside KOREA’S CONGLOMERATES: SeAH]
While others suffered in the oil shocks of the ’70s, SeAH rushed to supply pipes for oil infrastructure.
November 16, 2009 By Lee Ho-jeong
Next year, the SeAH Group marks its 50th anniversary.
SeAH started off in 1960 as a steel pipe manufacturer under the name Pusan Steel Pipe Industrial, founded by Lee Jong-duk.
The company was the first in Korea to manufacture steel pipes, which previously had to be imported. It was also the first to export steel pipes to U.S., in 1967.
SeAH rapidly grew on the back of exports, mostly thanks to the API pipes that the company developed.
While other companies struggled through the two international oil shocks of the 1970s, SeAH Group expanded significantly as countries rushed to develop their oil fields and demand for steel pipes surged.
According to the conglomerate, during the first 1973 oil shock supply couldn’t meet rising demand, but SeAH was able to meet demand in the second oil shock in 1979, as it expanded its manufacturing operations.
The next major change at SeAH took place in 1995, when Lee Woon-hyung succeeded his father as chairman. Six years later, in 2001, it transformed itself into a holding company to maximize value and raise the efficiency of its management.
SeAH’s subsidiaries are involved in three main sectors: manufacturing, IT and logistical services.
Last year the company’s revenue amounted to 5.4 trillion won ($4.7 billion) total.
As of this year SeAH ranks 38th in total assets, right after Samsung Tesco, among Korean conglomerates. It has 22 affiliates with over 4,000 employees, according to the Fair Trade Commission.
SeAH also operates 20 overseas units, which it has been moving aggressively to expand. Most recently, in March, the group opened its first 8-inch API steel pipe production plant in Vietnam.
“SeAH is a company that has played a significant role in Korea’s steel industry,” said Kim Hyun-tae, an analyst at Hyundai Securities. “SeAH Steel, whose primary businesses are steel pipes and cold-rolled steel sheets, was the driving engine behind SeAH Group’s growth.”
But the analyst added, with competition in the steel pipe industry getting fiercer, especially now that Chinese manufacturers are improving quality while maintaining competitive prices, SeAH Besteel is rising as the new driving force.
“SeAH Besteel manufactures special steel, and the company holds a dominating position in the market,” Kim said. “Although the company is not as massive as Posco or Hyundai Steel, it still has the potential for further growth in the long run.”
Behind SeAH Group’s tenacious growth is the cooperation between Chairman Lee Woon-hyung and his younger brother, Vice Chairman Lee Soon-hyung.
While the older Lee is in charge of outside business relationships and the overall vision of the conglomerate, the younger Lee focuses on enhancing the efficiency and profitability SeAH’s inner workings.
The steel manufacturing group now faces the growing threat of cheaper Chinese products. Chairman Lee has asked his employees to improve the quality of their products and diversify their businesses.
The chairman has a history of contributing to culture and the arts, receiving an art patron award from Montblanc for his persistent support of organizations including the Korea Festival Ensemble.
Lee is the fifth Korean to receive the award. Previous recipients include the late Kumho Asiana Group chairman Park Seong-yawng, as well as Park Young-ju, head of Eagon Industrial.
Lee Soon-hyung, the younger brother and vice chairman, has been in the family business since 1984, when he was president of Haiduk Steel. He officially took on his larger role as vice chairman to assist his brother when SeAH Group turned into a holding company.
It’s hard to talk about the history of SeAH Group and not mention Gong Won-iel, vice chairman and joint chief executive officer of SeAH Steel, and Kim Si-won, SeAH Group vice chairman and chief executive of Korea Bundy.
Gong is an engineer who started his career at SeAH Group in the 1970s. His first position was as a plant manager. Since then, he has toured every SeAH Group plant to oversee their work.
Meanwhile, Kim Si-won was one of the main contributors to SeAH’s expansion on the global market.
Kim worked at a leading Korean lumber conglomerate before joining SeAH.
Lee Sung-hwi, chief executive of SeAH Besteel, has helped drive his company to record earnings despite the economic downturn. Lee’s division turned in revenue of 1.84 trillion won, while operating profit was 181.5 billion won in 2008.
Besteel’s Lee is a veteran in the steel industry and has been working as an engineer for 30 years. His career started off at Pusan Pipe, which today is SeAH Steel, in 1989.
He was named head of SeAH Besteel in 2003, and in just a year the company turned from a deficit to a profit. By 2005, SeAH Besteel was seeing stable revenue of 1 trillion won and operating profit of 62 billion won.
Last year, the steel manufacturer successfully actually expanded its manufacturing capacity, to two million tons of steel and 1.8 million tons of steel products. Capacity had previously been limited to 850,000 tons a year.
Lee’s success is said to have come from a focus on steel for applications in automobiles, ships and machinery. Noticing that production capacity will not be able to meet demand, he pushed for investment in expanding facilities. Since 2004 SeAH Besteel has invested 500 billion won in its production facilities.
Park Eui-sook, the wife of chairman Lee, is in charge of the group’s information technology divisions: SeAH Networks and DreamLine.
Not only is Park one of the few active female chief executives in the world of Korea’s conglomerates, her status as a female CEO in the information technology industry makes her a member of an even more exclusive club here.
SeAH Networks was established in January this year from the merger of two IT units - SeAH Information & Communication and SeAH Information System.
SeAH Information & Communication last year enjoyed earnings of 116.1 billion won and a net profit of 5.3 billion won. SeAH Information System posted 20.2 billion won in earnings and a net profit of 1.7 billion won during the same period.
DreamLine is a high-speed Internet business that SeAH Group acquired in 2003 in order to strengthen its IT unit.
Resource from http://joongangdaily.joins.com |
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