Cable maker wired to the world

LS Group officials including LS Group Chairman John Koo, center, participate in a ceremony marking the completion of LS Tower in Hogye-dong, Anyang, Gyeonggi, in May 2008. Provided by the company

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

Even though share prices have hit rock bottom and most companies are grappling with the difficulties of a global economic downturn, a handful of companies always find a way to shine despite hard times.

LS Group, the nation’s 18th-largest conglomerate, is one. LS stands for “leading solution.”

“Amid the bleak outlook, hard times will last until the first half of next year. Non-financial industries are likely to report 30 percent operating deficits, but LS Cable will report a 2 percent operating profit growth,” Kim Ji-san, an analyst at Kiwoom Securities, said in a report.

LS Cable, Korea’s biggest wire and cable maker, is LS Group’s flagship unit. Industry officials say cable industries are less affected by economic turmoil because both emerging and developed countries want to replace worn-out cables, and Korean wire and cable makers are price competitive because the Korean won is weaker than other currencies.

There are other reasons analysts are positive about LS-related shares.

LS Cable acquired U.S.-based wire maker Superior Essex in August last year and became the world’s third-largest wire and cable maker.

More recently, LS Cable was chosen as a winner by Korea Electric Power Corp. to lay cable under the seabed between Jindo in South Jeolla and Jeju Island to supply electricity to Jeju, a project worth 550 billion won ($401.5 million).

Behind LS Group’s steady growth, the organization’s leadership of globalized group owners and trusted managers plays a decisive role. The group also says its board of directors maintains management transparency. The group says the board of directors functions as a coordinator between group CEOs and affiliate presidents.

The group is expected to earn 1.2 trillion won in operating profits based on sales of 19 trillion won in 2008 after it spun off from LG Group back in 2003. It took only five years for the group to enter the so-called 1 trillion won in operating profits club.

For some, this status takes more than 10 years to achieve. Given the fact that LS Group reported 348 billion won of operating profits based on sales of 7.4 trillion won in 2003 with four affiliates, its growth is outstanding because the group now has 30 affiliates.

Chairman John Koo (Koo Cha-hong), nephew of LG Group’s late founder Koo In-hwoi, steers the group. John also has family ties to LG Group Chairman Koo Bon-moo. Chairman Koo’s father is John’s cousin.

John started his career at LG International Corp. (formerly Bando International Corp.) in 1973 and earned the nickname “global CEO” after he spent more than 10 years overseas doing business, including in Singapore and Hong Kong.

The LS Group chairman supports and leads large-scale overseas projects including the building of the LS Industrial Complex in Wuxi, China in 2005. He also encourages employees to be creative by hosting the LS Technology Fair, which displays the latest technologies made by LS affiliates.

Christopher Koo, (Koo Cha-yol) chairman and CEO of LS Cable, is also a globalized LS Group leader and another of John Koo’s cousins.

He reportedly has a vast knowledge of international finance. The number of the company’s overseas corporations has increased to 24 in five years from 10 when he took his position in 2004. Positioning LS Cable as the world’s third-largest cable maker by acquiring Superior Essex is one of his great achievements.

Koo Cha-yup, chairman and CEO of Gaon Cable, was appointed to his current post in 2004. He achieved 400 billion won in sales the same year he took office. Reforms Cha-yup made to the managerial system produced Gaon Cable’s highest-ever sales in that year. He also branched out into auto parts production in 2007 to cope with the country’s saturated cable market.

Koo Cha-myung, vice chairman and CEO of LS-Nikko Copper, started his career at U.S.-based Chevron Corporation and has spent 14 years working at refineries. He is known to spend one-third of the year overseas to socialize with industry insiders. Due to his efforts, LS-Nikko Copper has hosted diverse copper-related international events on its home soil.

Cha-yup and Cha-myung are John Koo’s younger brothers.

Koo Ja-yong, vice chairman and CEO of E1, worked for LG Electronics over the past 22 years, and his years at overseas corporations has helped E1, an importer of liquefied petroleum gas, conduct business with companies in Indonesia, India, Vietnam and other countries. He is also noted for managing management-labor relations. There have been no labor disputes over the past 14 years.

Koo Ja-kyun, president and CEO of LS Industrial Systems, is a professor-turned-entrepreneur who emphasizes the importance of human resources.

Ja-yong and Ja-kyun are Christopher Koo’s younger brothers.

Under the six group owners, LS Group has seven CEOs, each with his own expertise. Although the Koo family is based in Jinju, Gyeongnam, its affiliate CEOs come from diverse regions including Seoul, Gyeonggi and Jeonnam, and they have diverse backgrounds.

Son Jong-ho, president & CEO of LS Cable, is often dubbed a strategist because he has been working to develop new overseas markets and new business opportunities.

If Son is the strategist, Shim Jae-seol, president & CEO of LS Mtron, has the Midas touch. When he was designated head of the machinery business division at LS Cable in 2004, he led a turnaround, helping the division achieve profits after nine years in the red.

Choi Kyung-hoon, president & CEO of Yes’co, is known as a gas man due to his 23-year career at that company, which provides gas to the northern and eastern parts of Seoul, and some cities in Gyeonggi including Gapyeong, Pocheon, Guri, Namyangju and Yangpyeong.

Ken Lee, (Lee Kwang-woo) CEO of LS Corp., is Chairman John Koo’s right-hand man. He is known as a hero in the takeover of U.S.-based Zenith when he and Chairman Koo worked for LG Electronics. Lee currently heads LS Corp. after LS Group launched a holding company on July 1 last year to improve corporate governance.

Lee Dae-hoon, president & CEO of LS Networks, Hwang Soon-chul, president & CEO of JS Cable, and Hwang Yun-ha, president & CEO of LS Asset Management, are all experts in international trade, cable and finance.

Another seven senior executive vice presidents back up LS group executive officials. Among them, Han Jai-hoon of LS Industrial Systems is regarded as a financial expert. He led financial restructuring in 2000.

By Sung So-young Staff Reporter [so@joongang.co.kr]