Samsung Electronics Vice Chairman Lee Jay-yong.

Samsung Group has set “practicalness” as its 2016 management buzzword, indicating additional group-wide restructuring. Group CEOs have been told to explore new growth businesses and arm themselves with a sense of crisis, as the year 2016 is forecasted to have starker business circumstances than 2015. 

Samsung Group Vice Chairman Choi Ji-sung, chief of Samsung Group’s Strategic Planning Office, presided over a meeting of CEOs of the group’s subsidiaries at the Samsung Human Development Institute in Yongin, Gyeonggi-do, on Dec. 28. Some 50 CEOs participated in the meeting, but Samsung Electronics Vice Chairman Lee Jae-yong and other group owner family members were not present. 

Samsung Group Vice Chairman Choi told the CEOs to “be armed with a sense of crisis” and explore new growth engines. In particular, the CEOs were told to have inquisitive minds and pay more attention to practicality. 

President Cha Moon-jung of Samsung Economic Research Institute, a think tank, lectured on the current situation of the Korean and global economies and the 2016 economic forecast. CEOs of major subsidiaries gave a briefing on their respective 2016 management strategies. The participants had a discussion on how to implement the so-called Maha Management that Samsung Chairman Lee Kun-hee declared during a meeting of Samsung Electronics CEOs and those of related subsidiaries in March 2003. Maha Management refers to a management plan calling for drastic changes in fundamentals to become a global “super company” as if a jet plane needs to transform the design of its engine and parts to fly at the speed of maha (340 meters per second). Samsung Group declared its 2014 management buzzword as Maha Management.

Samsung Group is stepping on the gas to nurture its bio business as one of the company’s future growth engines. The group is accelerating its efforts to foster the bio business by establishing Samsung BioLogics, a bio pharmaceutical contract manufacturing company, and Samsung Bioepis, a biosimilar maker. 

The biosimilar segment is considered to have a high growth potential among manufacturing industries. In a few years, pharmaceutical companies saw facility investments into bio pharmaceuticals stagnate, but investments into a new antibody, high-tension drugs and biosimilars have surged of late. The demand for bio pharmaceuticals is forecast to double by 2020 and be in short supply thereafter. 

Samsung BioLogics launched the commercial operation of its first plant, and the company is soon to begin the operation of the second plant. 

Samsung Bioepis broke ground for a project to build its third plant, capable of producing 360,000 liters annually by 2018. The company has signed three contracts to supply bio pharmaceuticals with BMS of the United States and Roche of Switzerland.

Samsung Bioepis headquarters building in Songdo, Incheon. (Photos:Samsung Group)