Top conglomerates present business plans for next year

“Full-blown war wherein we fight in all battlefields and a protracted struggle where we must continue for long..."

This is what a senior executive of Samsung Group said Thursday when asked by The Dong-A Ilbo to pick key words in next year’s business plan. With the global economic slump likely to continue through next year, he said, Korean companies should secure new growth engines while pursuing crisis management and sound management structure at the same time.

The following is highlights of business plans for next year by Korea’s top 10 conglomerates by asset value, excluding state-run companies.

○ Anticipating full-blown welfare in all frontiers

Samsung`s management team, which will finalize the conglomerate’s business plan for next year at a global strategy meeting set for Dec. 17 and 18, was ordered to continue double-digit growth. Notably, the group is expected to spur its growth drive because its chief Lee Kun-hee recently proposed a “new challenge” on the 25th anniversary of his inauguration, and because next year will mark the 20th anniversary of his “declaration of new management.”

Samsung Electronics, the conglomerate’s flagship company, aims to expand its global lead over archrival Apple in smartphones achieved this year and sell 55 million OLED TV sets in targeting an annual operating profit ratio of 15 percent. The company also aims to secure the world No. 1 spot for refrigerators, washing machines and air conditioners by using China as its strategic hub.

Targeting 200 trillion won (185 billion U.S. dollars) in sales this year, the Korean tech giant is reportedly eyeing operating profits of 35 trillion won (32.3 billion dollars) to 36 trillion won (33 billion dollars) on 230 trillion won (212 billion dollars) in sales next year.

SK Group, which is drastically reshuffling its management structure, plans to improve the system of its management committee that will lead the conglomerate`s business management and conclude the reshuffle before finalizing next year’s business plan.

SK Telecom and SK Innovation, the conglomerate’s top two subsidiaries, will strive to achieve the dual target of “stability” and “growth.” SK Telecom, which has seen falling growth momentum due to mounting pressure to lower phone service fees amid sluggish growth of subscribers, aims to raise profitability by significantly cutting costs and providing high value-added data services to smartphone subscribers. SK Innovation will look for new growth engines by boosting competitiveness in oil refining and proactively engage in overseas operation.

LG Group has conducted a year-end reshuffle after Chairman Koo Bon-moo urged the “discovery of leading future industries,” and “strong capacity for execution.” LG Electronics is projected to top 1.2 trillion won (1.1 billion dollars) in operating profit this year, more than four times last year’s figure of 280.3 billion won (258 million dollars). As such, many analysts expect the company will start to regain its overall vitality.

The company projects to break the mark of 10 million units in quarterly smartphone sales from the second quarter next year if it introduces the models Optimus G, the 5-inch View series, L Series with sharp edge, and the mass market FX series. It will also mass produce OLED TVs in the first quarter next year, which heralds renewed competition against Samsung Electronics in TVs.

○ Tightening belts to prepare for ‘prolonged battle’

A source at Hyundai Motor Group said, “We are establishing a business plan under which we will focus again next year on sound business management rather than an overly ambitious expansion of business like we did this year.” Hyundai is expected to shift its focus on practical gains given the poor state of both the domestic and international car markets.

tesomiom@donga.com