LS Group Chairman Christopher Koo gives his New Year’s message at a ceremony to kick off the 2017 business year at the LS Tower in Anyang, south of Seoul, on Jan. 2.

LS Group Chairman Christopher Koo has declared  2017 as the first year to prepare for future growth.

Chairman Koo made the remarks at a ceremony to kick off the 2017 business year at the LS Tower in Anyang, south of Seoul, on Jan. 2. He urged his executives and staff members to start the year with an attitude different from that of the past. Specifically, he set management strategies: swift response to changes and trust management. 

“We’re stuck in a slump and confusion, enough to worry about the current economic conditions not seen since the 1997 Asian financial crisis, and some industries, including the shipbuilding and shipping industries, have already been undergoing massive restructuring,” the chairman said. 

“Our group is the same situation with a decline in sales, caused by the economic recession and the weakening of profitability, caused by a drop in copper prices, and mainstay businesses suffering the difficulties in seeking solutions to overcome sagging major exporting markets, including the Middle East and South America,” he said. 

To some consolation, he said, the group has seen its fundamentals improve. 

In 2016, he said, LS overhauled its management regime by opening a group management information system. 

Some Chinese operations and Superior Essex of the United States turned profits to serve as an opportunity, turning the tide in overseas businesses, according to Koo.

“But more worried about is this year, and with the deteriorating of political, economic and social uncertainties, we cannot see what will is going on down the road,” Koo said.

In Korea, he cited such stumbling blocks as political instability and the forecasting of an economic growth rate of low-2 percent, and externally, the spreading of protectionist moves, initiated by the United States, interest rate hikes, and China’s strengthening of regulations over foreign companies. 

Looking into the group’s business portfolios, which highly depend on overseas businesses, he said the uncertainties in the United States and China pose factors to threaten the group. 

Chairman Koo stressed that the group should prepare for the development of new business models based on digital and the preemptive control of future markets by such world-class players as GE, Siemens and Bosch amid the revolutionary moves of manufacturing industries, dubbed “Industry 4.0.”   

He urged them to start the year 2017 with a mindset of “guksecheokdo,” a Chinese saying that means the “overcoming of all difficulties and exploring of the future in a wise manner.” In this regard, he declared 2017 as the first to prepare for growth of the future of the group and suggested three strategies the group will carry out this year. 

First, he called for swift responses to changes and trust management. “As long as uncertainties grow, it is significant to enhance organizational response capabilities to lead future growth, and a management environment in which authorities are delegated dramatically and responsibility management is strengthened, with a fast decision-making process and avidly challenging spirit will be created,” he said. 

Externally, he asked for mutual trust among executives and staff members and trust-building with stakeholders. Second, he touched upon the realization of outcomes in major businesses. Third, he called for a structural shift to futuristic businesses. “We’ll reexamine and readjust the structure of its business portfolio to prepare for the future and secure its soundness while materializing the group’s digital transformation strategies to brace for an era of “Digital Revolution” to transform the foundation of the manufacturing industry.”

A view of the LS Tower, LS Group headquarters in Anyang. (Photos: LS Group)