Doosan Group has been restructuring and realigning its business lines ever since the 2000s under the strategy of “select and concentration.”
Doosan is Korea’s oldest business organization with a history of 116 years. Doosan began in 1896 as Korea’s first modern retail business, known then as Park Seung-jik Store, and has grown and developed for more than a century.
A History of Dynamic Change and Growth
“We diversified into brewing and international trade in the early 1950s and into construction, food & beverages, machinery, media and cultural services in the 1960s,” the company said. By the 1970s, Doosan was well established as a leader in Korean consumer products and culture-related businesses and our construction, machinery, and electronics businesses entered high-growth stages. During the 1980s, it focused on becoming international while also venturing into publishing and advertising. In the 1990s, operations were divided into three business sectors: information and retail; consumer products; and high-tech materials. In 1995, one year before the 100th anniversary, Doosan began to rigorously restructure with an aim to reinvent itself for the 21st century. It sold flagship affiliates, including OB Beer, improved profitability by integrating 23 affiliates into four companies (Doosan Corporation, Doosan Engineering & Construction, Doosan Packaging and Oricom) and introduced advanced management systems.
Doosan has aggressively acquired companies outside Korea to grow and globalize. In 2005, it acquired the water treatment business of U.S.-based American Engineering Service Inc. (AES) to set up Doosan Hydro Technology. In 2006, it acquired U.K.-based Doosan Babcock (formerly Mitsui Babcock Energy), with patented technologies in the design and engineering of boilers, as well as a large-scale casting and forging operation Doosan IMGB (formerly Kvaerner IMGB) in Romania. In 2007, Doosan Infracore acquired the U.S.-based Bobcat, the world’s No. 1 compact construction equipment company, to emerge as the world’s seventh largest construction equipment maker. In 2008, Doosan acquired Doosan Mottrol (formerly Tongmyung Mottrol), a hydraulic systems specialist, and Norway-based Doosan ADT (formerly Moxy Engineering), a maker of articulated dump trucks. Each of these acquisitions has added significant synergy value to the rapidly growing ISB business.
In 2011, Doosan Heavy Industries & Construction acquired Chennai Works, an Indian manufacturer of boilers for coal-fired power plants to raise its order-taking competitiveness in the local market. Also, it obtained a majority share of Germany’s Lentjes to access original technologies for eco-friendly power generation facilities.
A New History as a Top-tier Global Enterprise
“We have accelerated our globalization through aggressive cross-border acquisitions,” the company said. “As such, Doosan now operates 24 domestic and 113 overseas subsidiaries, generating 58 percent of our sales from outside Korea in 2011. Although we have already achieved significant changes, we will continue to pursue further transformation to provide exceptional products and services that inspire trust and pride among our customers, shareholders and employees.”
Doosan chose to pursue the infrastructure support business as its new main growth engine, a choice that has generated phenomenal growth. Sales (which totaled W3.4 trillion in 2000) reached 26.3 trillion won in 2011, a CAGR of 20 percent per year. Over the same period, operating profit increased from 300 billion won in 2000 to 1.7 trillion in 2011 won. This achievement was made possible through the simultaneous pursuit of both organic and inorganic growth.
A Balanced Growth of Scale and Profitability
Doosan Heavy Industries & Construction’s sales have steadily increased from 2.5 trillion won in 2001 to 8.5 trillion in 2011 won (including overseas subsidiaries). Equally impressive was the steady growth in operating profit, which rose from 93.0 billion won to 6.9 trillion won (including overseas subsidiaries), an average increase of 21 percent a year over the same period.
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