Company of the seas looks abroad for future growth

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Company of the seas looks abroad for future growth

테스트

Kang Duk-soo (59)
STX Group Chairman
Bachelor’s in business administration, Myongji University

“Faces inside Korea’s conglomerates” is a weekly series about key figures in major conglomerates to help readers understand Korea’s business world.

The STX Group is unique among leading Korean conglomerates.

It grew out of Ssangyong Heavy Industries, a unit of the Ssangyong Group, which collapsed during the 1997-98 Asian financial crisis. At that time, a top manager who was from outside the founding family struggled to keep Ssangyong Heavy alive and finally took it over himself in 2000.

The company was reborn as STX in 2001 and added affiliates through mergers and acquisitions, growing into Korea’s 12th biggest conglomerate by assets, if current or formerly state-run conglomerates are excluded from the list. STX Group sales, now with 18 units focused on shipping, shipbuilding, ship engines and plants, soared to 28 trillion won ($20.15 billion) last year from 260.5 billion won in 2001.

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STX Group Chairman Kang Duk-soo encourages workers at an STX Construction home building site in Abu Dhabi in late December.Provided by the company

The person behind the rapid growth is Chairman Kang Duk-soo. Kang worked for more than 25 years in the Ssangyong Group, accumulating experience in various fields including planning, finance and management. After Ssangyong Heavy was sold to a foreign fund during the Asian financial crisis, he was appointed as chief executive officer in 2000. He bought the company from the fund using 1.5 million shares he had in stock options and all his private property.

The next year, Kang acquired Daedong Shipbuilding, which is now STX Shipbuilding. The shipbuilder’s exports increased sharply, helped by the industry’s global boom, and it is now the world’s fifth-biggest shipbuilder. With the subsequent profits, the STX Group in 2004 took over a local shipping company, Pan Ocean Bulk Carriers. Now STX Pan Ocean, it has become Korea’s biggest bulk-carrying line. And STX Heavy Industries Co. was established to develop diesel engines for large vessels and to build offshore plants. STX Enpaco Co. was also established to develop engine parts.

“It is Kang’s philosophy to develop the business group into a conglomerate focused on shipping, shipbuilding and energy, sectors which generate high synergy with one another, and to focus on overseas markets rather than the local one,” a spokesman said.

Based on this philosophy, STX Group took over Norway-based Aker Yards, Europe’s biggest shipyard and the world’s second-biggest builder of cruise ships, through a long, tough process from 2007 through last year. In September, Aker Yards finally switched its name to STX Europe. Kang said at the time, “European companies’ perceptions of STX have now changed completely.”

Aker Yards, which more than 160-year history, at first expressed antipathy toward the unfamiliar Asian conglomerate when STX first took over a controlling stake. The situation gradually improved, as Kang frequently met with board members and unionized workers at the Norwegian shipyard.

While Korea is now the world’s largest shipbuilding nation and is strong in construction of container ships, oil tankers and offshore plants, it has been weak in the construction of cruise ships, which are one of the highest-value-added ships. So, STX’s move is attracting great attention.

Kang is supported by four vice chairmen. Unlike other conglomerates, the relatively young STX Group is flexible about recruiting executives from other companies.

Among the four vice chairmen is Lee Jong-Chul, who heads STX Corp., the business group’s holding company, and STX Pan Ocean. Kang has so much trust in Lee, a former executive of Pan Ocean Bulk Carriers, that Lee has become one of STX’s most important figures only three years after joining the conglomerate. He led the shipping company’s efforts to be listed on the Singapore stock market, a first among local companies, and to make inroads into the liquefied natural gas carrying business.

The STX Group’s shipbuilding business is now led by Vice Chairman Lee In-sung. He is an expert in the field, having worked for more than 30 years at Daewoo Shipbuilding & Marine Engineering, the world’s third-biggest shipbuilder. He joined STX Group early last year and will focus on integrating the management of STX Europe and STX Dalian, creating a triangle of Korean, Chinese and European production bases.

Vice Chairman Jang Won-gab is regarded as the figure who led STX Shipbuilding’s rapid growth by upgrading efficiency at the shipbuilder’s Jinhae yard in South Gyeongsang. He is also a shipbuilding expert; he started his career at Hyundai Heavy Industries, the world’s biggest shipbuilder, in 1972 and has continued to work in the industry. This year, he will lead the plant business, which is the STX Group’s new focus.

Vice Chairman Lee Myung-kee, meanwhile, has aided Chairman Kang longer than any other executive. The two worked together at Ssangyong Group. Lee is also an expert in doing business in China. He took charge of many major development projects at STX Shipbuilding, including the Skid Launching System, which allows vessels to be built on land and launched into the sea. He also led construction of the company’s shipbuilding sites in China.

Among other top managers is STX Pan Ocean President Kim Dae-yoo, who helped the company mark record high sales and profits in the first three quarters of last year, with his expertise in international trading.

STX Dalian Group President and CEO Chung Gwang-suk was lead engineer on the Skid Launching System, which helped STX Shipbuilding grow into the world’s fifth-biggest shipyard.

STX Shipbuilding President and Chief Operating Officer Kim Kang-soo and President and Chief Financial Officer Hong Kyung-jin oversee the shipbuilder’s continued growth. Kim, a former naval officer, has been reinforcing the offshore plant business. And Hong will help integrate management of STX Europe and STX Dalian,

STX Engine President Chung Dong-hak and STX Enpaco President and CEO Song Woo-yik lead the ship parts affiliates. Chung has obtained large-scale orders to supply defense industry-related engines. And Song is focusing on developing essential parts for diesel engines.

The STX Group’s relatively new businesses are led by STX Heavy Industries President and CEO Rhee Kang-sik, STX Energy President Yeoh Hyuk-jong and STX Construction President and CEO Kim Kook-hyun. Rhee is reinforcing the industrial plant business and Yeoh, a former S-Oil executive, is strengthening the steam supply and power generation business. And Kim is an expert in overseas plant construction.


By Moon So-young Staff Reporter [symoon@joongang.co.kr]
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