Chairman Huh Chang-soo of GS Group

Chairman Huh Chang-soo of GS Group announced that the group has allocated 3 trillion won for investment this year, more than 1 trillion won more than last year under an idea that crises also create opportunities for companies.

The chairman’s announcement came during a meeting of group executives at GS Tower in Nonhyun-dong, southern Seoul, on April 16 during which he also said they have to overcome uncertainties in the business environment in order to turn the crisis into an opportunity through creative challenges and sustainable efforts so that they will become creative leaders.

The chairman warned that the global economy is going through various uncertainties such as the U.S.’s QE taper, Japan’s weak yen policies, and economic crises in emerging countries. As the situation gets worse, they should always recall the saying that a crisis means an opportunity to overcome various risk factors that crop up in these times of uncertainties, Huh said.

“We should never take a passive attitudes toward uncertainties, but take them as an opportunity for reform to weed out various ineffective factors in our operations and to make investments,” Huh said.

The chairman also mentioned that the group should play a leading role in the government drive to spur domestic investments to perk up the economy.

He said the government has been making moves to ease or remove unnecessary regulations in order to attract investments and at the same time create a base for further economic growth, so GS Group, too, should increase investments in R&D and strategies to prepare for its future operations with strategic investments.

The group’s 3 trillion won investments are to go to its key businesses such as energy, distribution, and construction, among others, to sharpen their competitive power and also to search for future growth engines.

Some 2.2 trillion won has been allocated to GS Caltex to expand the third crude oil refining facilities, a thermal power plant project, and the construction of a product wharf along with GS Energy’s overseas exploration operation. Of the remaining investments, 600 billion won will go to GS Retail’s expansion of its shops and 200 billion won will go to its new growth engines.

GS Caltex will also go ahead with the paraxylene joint-venture project with Showa Shell and Daiyo of Japan, which is projected to cost 1 trillion won in investment. Legal problems have been solved with the revision of the foreign investment law in the parliament, but the global slump of the petrochemical market has been delaying the project, arousing fears that the project might not be able to take off.

GS Caltex officials said talks are being held with the Japanese side on when to kick off the project, while final touches on detailed design and basic work for the project are being undertaken, with no sign for giving up the project.

The group will also continue to promote the Bukpyeong Thermal Power plant project. The Financial Supervisory Commission said GS E&R, formerly STX Energy, will invest 70 billion won in the GS Donghae Power Plant, a joint-venture between GS E&R (51 percent) and Korea East-West Power Co. (49 percent), which are ready to build two thermal power plants in the Bukpyeong Industrial Complex in Donghae City in Gangwon Province by 2016. GS E&R plans to invest a total of 306 billion won in GS Donghae Power Co. and has already invested 234.6 billion won as of February this year.

GS Group plans to make power generation one of its key growth engines in the future. The group’s total investment in facilities this year have ballooned to over 3 trillion won, the largest in its history, because of its investments in the construction of thermal power plants in Bukpyeong through its affiliate GS E&R.

GS group was launched 10 years ago, splitting with LG Group, with GS Caltex and GS Construction as key affiliates.  

 GS EPS Power Unit 3 at the Bugok Industrial Complex in Dangjin City, Chungcheongnam-do.