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[Focus] Doosan now 8th largest conglomerate

Posted December. 13, 2000 14:48,   


By taking over Korea Heavy Industries and Construction or HANJUNG, Doosan Group's assets soared to 11.6 trillion won from the previous 7.6 trillion won. And Doosan¡¯s ranking among Korean conglomerates rose from 12th to eighth in terms of assets.

When the carrier of the projected IMT-2000 services -- the next generation of mobile communications services -- is selected Dec. 15, for which SK and LG are competing, the ranking of Korea¡¯s biggest conglomerates again might change.

Hanwha, considered as a restructuring model along with Doosan, shows its strong will to acquire Daehan Life Insurance.

The changes in corporate rankings, triggered by Hyundai's family feud over the group's managerial right, enabled smaller groups and advanced others in their rankings.

Doosan Group began restructuring before the outbreak of the foreign exchange crisis, selling off even profitable 3M, Kodak and Nestle operations, to streamline its operation. As a result, the group has become a healthy corporation with 7.64 trillion won in total assets and 3.65 trillion won in total sales. Still, the group's problem was that it had no major businesses. Eventually, the group succeeded in taking over HANJUNG, nurturing heavy industries and plant facilities as its strategic business for the future.

Hanwha shrank it business scope to petrochemical by selling its core businesses such as Hanwha BASF and its refinery. With the money raised in the course of restructuring, the group is planning to take over Daehan Life Insurance by forming a consortium with overseas financial institutions.

"Our goal is to grow as a financial group by combining securities and investment-trust units with Daehan Life Insurance, which we are trying to take over," Chung E-Man, managing director of the group's restructuring team, said.

Lotte Group, known for its abundant cash reserve, draws attention with its vice chairman Shin Dong-Bin emerging as new captain of the group's management. Lotte announced that it would concentrate on distribution and leisure businesses for the time being, but rumors spread that it would enter the home shopping business, as well as acquire a state-run corporation.

With regard to selection of the nation's IMT-2000 carrier, LG and SK, which are ranked third and fourth among Korean conglomerates, are competing fiercely with each other. It is referred to as the "gun fight at the IMT corral."

LG restructuring team head Kang Yu-Shik said that LG never imagined that it would lose in the competition for IMT-2000, showing the group's strong confidence about the project. SK also expressed that it maintains a competitive position against LG as it has accumulated know-how in mobile communications service.

LG has drawn its restructuring plan based on IMT-2000, so it has to redesign its business picture if it fails in winning the business. SK is in the same situation. If it fails to win the rights to IMT-2000, the group's communications business will be weakened and SK will remain as a smaller group.

Among the nation's big four business groups, Hyundai has become smaller, as its automotive unit was separated, along with the trouble faced by Hyundai Engineering & Construction.

An official at Samsung Group said that the picture of the Korean business world might change this week, noting that the group that wins the IMT-2000 business will emerge as one of the leading groups, along with Samsung, that will lead Korean industries.

Park Won-Jae parkwj@donga.com