Doosan Group Aims to Raise Portion of New Growth Businesses to 60% by 2025

Chairman Park Jeong-won of Doosan Group. (Photo: Doosan Group)

Doosan Group, coming out of two years of creditor management, is predicted to accelerate efforts to secure future growth engines.

Doosan has stepped on the gas to secure an upper hand in gas turbines, wind power, small modular reactors (SMR) and other renewable energy power generation businesses.

Doosan is seeking to acquire Tesna, a leading test service company, a key back-end process in the semiconductor industry.

Doosan Group graduated from creditor management on Feb. 28, exactly 23 months after the group got itself trapped in a liquidity crisis as the COVID-19 pandemic hit the world.

Korea Development Bank and Korea Eximbank announced the termination of an MOU on the restructuring of the financial structure they struck with Doosan.

A Doosan Group official said it was pleased for Doosan Group to graduate from creditors’ management in a short period of time thanks to group executives and staffers’ efforts.

Doosan will make every effort to maintain a sustainable growth through improved financial standing and new growth engine businesses such as gas turbine, wind power and SMR, the official added.

The corporate data research institution CEO Score reported that Doosan grew in the early 2010s to rank 10th among conglomerates, but now ranks 17th after undergoing restructuring.

The group saw the number of its subsidiaries shrink from 20 to 10, including Doosan Heavy Industries & Construction, Doosan Bobcat, Doosan Fuel Cell and Doosan Robotics.

But now that Doosan Group is out of creditor management, the company can make investments in new growth engine businesses without the creditors’ intervention.

Doosan, seeing its credit rating rise, is in a better position to win more project orders. The group is more likely to resume the hiring of new employees, which it has not seen over several years.

Doosan Heavy Industries & Construction, the flagship company of Doosan Group, aims to raise the portion of new growth engine businesses to 60 percent.

A large-scale gas turbine for power generation, developed by Doosan Heavy Industries & Construction for power. (Photo: Doosan Heavy Industries & Construction)

To this end, Doosan Heavy Industries & Construction will step on the gas to explore renewable energy power generation businesses.

The company plans to make the gas turbine business a future growth engine.

Doosan Heavy Industries & Construction became the fifth company in the world to develop a gas turbine. Gas turbines are a representative renewable energy power generator designed to produce power by burning gas.

Doosan Heavy Industries & Construction is focusing on commercializing SMR, deemed as an alternative to nuclear power.

To this end, the company had already struck an MOU on cooperation with Nuscale Power, a U.S. nuclear power company.

Advanced SMRs offer many advantages, such as relatively small physical footprints, reduced capital investment, ability to be sited in locations not possible for larger nuclear plants, and provisions for incremental power additions. SMRs also offer distinct safeguards, security and nonproliferation advantages.

Doosan Heavy Industries & Construction is accelerating efforts to explore the wind power business with the goal of raising sales in the business to more than 1 trillion won in 2025.

But it is expected to take time to see the growth engine businesses realize commercialization and yield profits.

Doosan Group is also trying to conduct an M&A with Tesna, specializing in a key of back-end process in semiconductor industry.

Investment bank sources said the private equity fund ACE Equality Partners is known to be in negotiations of disposing of a 30.62 percent stake in Tesna to Doosan.

Tesna has major cooperative companies, such as Samsung Electronics and SK Hynix.

Meanwhile, Doosan Heavy Industries & Construction held a board directors’ meeting on March 8 and passed a proposal to change its name into Doosan Enerbility.

The new name will be approved during a regular shareholders’ meeting, scheduled to be held on March 29. Enerbility of the new name is a combination of energy and sustainability, meaning the enabling the union of energy and sustainability.

Doosan Enerbility, expressing the principal core values of its businesses, indicates its willingness to secure sustainability by making energy technologies the company produces further enliven human life and further clean the earth, a company official said.

The name change comes 21 years since 2001 when the current name made its debut.