Trigem battling financial pressure

Trigem Computer Inc., Korea’s second-largest computer manufacturer, is battling internal and external market difficulties to return to profit. The company posted a net loss of 500 billion won ($420 million) last year. Korea Thrunet Co., a broadband Internet service provider and affiliate of Trigem, filed for court receivership in the Seoul District Court on Monday. Another Trigem telecommunications subsidiary, Naray Co., was an investor in Soft Bank Korea Inc., a technology firm, which was allegedly embezzled out of 30 billion won by RF Logic Co. before the company went bankrupt and its chief executive and owner, Lee Byung-hoon, fled the country last November. Hyundai Investment and Securities Co. has lowered its outlook for TriGem from “buy” to “market perform.” “We have already booked the insolvent assets of our affiliates, including Korea Thrunet, as an appraisal loss last year to cut negative influences this year,” a Trigem official said. “We will now concentrate on strengthening their competitiveness.” Trigem earned 2.4 trillion won worth of sales last year, but still posted an operating loss of 152 billion won. Falling computer sales have been attributed to a slowdown in the world market, which had been in decline for the past four years, the company said. Trigem exports 70 percent of its products. Major overseas customers include Hewlett Packard Co. and E-Machines Inc. of the United States. Industry sources, however, said that a recent $4 billion contract between Trigem and Hewlett Packard fell through. Furthermore, Trigem had been negotiating with domestic firms Hanaro Telecom Inc. and Dacom Corp. to sell Korea Thrunet to either party but the two negotiating parties called it quits because the Trigem subsidiary was allegedly linked to the RF Logic fraud case. “Trigem has made a mistake in that the company did not invest money to enhance its competitiveness, but rather wasted money to support affiliates,” said Park Kang-ho, an analyst at LG Investment and Securities. Trigem has also failed in the telecommunications business since the early 1990’s, when the company started investing in it. Naray and Co., a paging communications service provider, had more than 2 million members a decade ago, but failed to cash in on the mobile phone trend that has replaced its business. Trigem, however, claimed it would soon revive itself from financial difficulties through harsher reorganization. “The company has a strong financial status with 50 billion won in cash assets,” said Kwon Yeon-hak, a stock manager of the firm. Trigem is planning to increase exports this year to 4.3 million computers ― 1 million more than last year. The firm’s PC production plant in Gyeonggi province is to be separated in April, after another mainboard production factory with 100 workers, also in Gyeonggi province, was separated last month. by Yum Tae-jung