Hyundai Oilbank has been named as winner of the 11th Management Transparency Grand Award by the Korea Employer’s Federation and five business associations on Jan. 4.
The citation for the award said the oil refinery has been subjected to a unique management system as a member of Hyundai Heavy Industries Group, having its operation audited by the Audit office of the group, which concluded it stuck to ethical management rules. The oil refinery has been providing the global leadership program to all of its employees and the overseas training program, donating one percent of each employee’s salary every year to social service programs, in line with the company’s social service activity program.
Other grand award winners include LG Electronics, POSCO, Shinsegye, KT, KSS Shipping, LG Chem, SK Innovation, Hynix Semiconductor, Asiana Airlines, Doosan Heavy Industries and Construction and SK Chemical.
Hyundai Oilbank was the only oil refinery in Korea that ended last year in the black, while all other oil refineries suffered losses for 2014, including S-Oil, which recorded for the first time in 34 years. According to oil industry sources, S-Oil recorded 28.557 trillion won in sales, but registered 258.9 billion won in operating loss last year, with 213.2 billion won of that coming in the fourth quarter. SK Innovation and GS Caltex were said to have finished the year in the same situation as S-Oil.
But Hyundai Oilbank recorded 179.2 billion won in profit in the first three quarters of last year and the encouraging situation continued into the fourth quarter, helping the oil refinery to continue to make profits
for 10 quarters in a row.
President Moon Jong-bak said the Q4 sustained losses, but overall, the company came out ahead last year due mostly to a loss from oil stockpiles that wasn’t as bad as originally feared
Oil refineries must have at least 40 days crude oil inventory all the time and they are bound to lose money when prices oil shoot up like it have now. Hyundai Oilbank has been able to minimize losses through quick actions as its scale is not as big as some of its rivals. The oilbank can only refine 390,000 bbls of oil daily compared to SK Innovation’s 1.115 million bbls, GS Caltex 775,000 bbls and S-Oil 669,000 bbls.
Furthermore, the oilbank has been operating a task force to cut the cost of oil refining from 2013 by diversifying oil import sources to areas other than the Middle East and increasing the ratio of high-quality oil production by producing light oil from heavy residual oil. The oil bank’s light oil production ratio stands at 36.7 percent compared to SK Innovation’s 17.2 percent, GS Caltex 34.6 percent and S-Oil 22.1 percent.
The oilbank also has been trying to enter the petrochemical industry by signing a contract with a German carbon black company to jointly set up a carbon black plant in a move to diversify its business to ensure its future survival. Officials of the oilbank said the carbon black business could make some 300 billion won in annual profit if all goes well.
Hyundai Oilbank aims to contribute to the creation of a better society through donations and community service activities. All of the company's executive members and employees participate in community service activities by voluntarily signing up with at least one community service club. Furthermore, the company collects small change (less than 10,000 won) from the monthly salary slips of executive members and employees and donates it to public organizations and various charities in the winter season.
