Dongbu Group Ups the Ante on Semiconductor

Kim Joon-gi, chairman of Dongbu Group, is set to reform the conglomerate by reforming its management system.

Dongbu Group is narrowing its existing four business areas - materials, chemicals, service, and finance - to three – manufacturing, service and finance – a group representative said on Wednesday.

A Dongbu Group official stated, “The integration of materials and chemicals into manufacturing will enhance internal synergy. The recent decision to merge Dongbu Hannong Chemicals with Dongbu Electronics is part of the effort.”

At present, Dongbu Group is divided into four main business areas: materials (Dongbu Steel and Dongbu Electronics); chemicals (Dongbu Hannong Chemicals, Dongbu Fine Chemicals); service (Dongbu Construction and Dongbu Engineering) and finance (Six companies, including Dongbu Life Insurance). Dongbu Ltd. and Dongbu Information and Technology, which has been implementing the restructure of the group, will provide support to affiliate companies.

The measure was designed to resolve the current deadlock, with conglomerates such as Kumho Asiana and Doosan Group, who were similar in size to Doosan and were also among the top ten companies, having successfully developed their future growth engines by expanding through mergers and acquisitions.

The restructuring of Dongbu Group is taking place in earnest with the aim of helping the group to focus on semi-conductor related businesses – the main choice for the group’s future growth engine.

Dongbu Electronics has been strengthening its competitive edge in the semi-conductor industry through its acquisition of Tomato LSI, a domestic chip designing firm. The company formed by the Dongbu Hannong Chemicals-Dongbu Electronics merger is expected to gradually increase the group’s revenue from electronic materials by promoting its semi-conductor business.

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