Samyang Group held a ceremony on Feb. 15 at its head office in Yeonji-dong, Seoul to declare its 2020 Vision, with Chairman Kim Yoon leading some 400 officers and staff of the group.
Marking its 92nd anniversary, Chairman Kim said the raw materials business has been doing well over the past five years, but has made employees too comfortable. “Its about time that we should have a crisis feeling that the company has failed cope with the changes and work harder so that the group would be able to maintain its healthy operation in the next five years,” the top manager urged.
The CEO called for a meeting as sales revenue has fallen every year in the past five years. He said action is needed to turn it around. In 2012, sales revenue amounted to 5.2 trillion won for the group, but that slipped to 4.5 trillion won in the following year and 3.6 trillion won in 2015, setting off alarm bells and raising calls to reverse the trend.
With its main businesses being chemicals and foods, the group traces its roots back to 1924 when it was founded by the late Kim Yeon-soo. Originally called Samsu Co., it began in the farm management and land reclamation business. That expanded in 1955 to include sugar refining and in 1969, to a polyester plant in Jeonju, North Jeolla Province.
The chairman, who is a grandson of the founder, took his position in 2014.
The group began to slip from 2011 when Samyang Holdings was launched as the mother company of the group. Since then the global economy has failed regain its past luster.
The group’s annual sales plunged to 3.6 trillion won in 2014. Sales by Samyang Co., a major affiliate, fell to 1.4 trillion won; and sales from Samnam Petrochemical slipped to around 900 billion won. An official of the group said the petrochemical company used to post more than 2 trillion won in annual sales, but has been bludgeoned by the demise of oil prices and the expansion of TPA in China, creating a glut in the petrochemical products supplies around the world. The group is now working on tightening management to minimize losses, rather than expanding its businesses, the official said.
Samyang Co. took over three affiliates in the past five years including Samynag EMS, a maker of semiconductor chips, electronic parts in 2013, which was followed by a takeover over of Samyang WellFoods and Samyang Milma in 2014. The company also took over Samyang Genetics, a maker of starch in January.
Chairman Kim said such leading businesses as steel, chemicals and shipbuilding, which had been a strong force in the economy, have been struggling to cope with various problems, while other private business firms have been going through restructurings to strengthen their competitive power. Samyang has not been an exception, he said. He said Samyang will firm up its base for the future through quality growth and achieve 5 trillion won in annual sales.
The group will further strengthen its major operations, including the materials for light auto production, multiple composite materials and next generation ion exchange resins. In the area of foodstuff production, the group will seek to develop new materials, explore new markets for Korean foodstuffs overseas, and supplement the marketing for its foodstuffs. In the area of the medical bio business, the group will secure new technologies to diversify its product portfolio and look for overseas operation to boost the earnings.
The chairman said they will not hesitate to pursue M&As with foreign firms that have great potential to expand the group’s business portfolio and open up new growth engines.
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