Dongbu’s strength built on trust
Kim Jun-ki, center, chairman of Dongbu Group, celebrates the installation of a 160-ton electric arc furnace, one of the two largest in Korea, with Dongbu Steel employees at a steel plant in Dangjin, South Chungcheong, in December. Chairman Kim is known for monitoring the progress of Dongbu Group’s field projects and setting up frequent meetings with working-level employees. Provided by the company
Kim Jun-ki (64)
Dongbu Group chairman
Bachelor’s degree in economics, Korea University
Four decades later Dongbu has grown into one of Korea’s leading conglomerates, its businesses ranging from construction to finance and advanced technology.
Dongbu Group rapidly grew in the 1970s with the construction boom in the Middle East. In the 1990s, Dongbu diversified its business to include chemicals, logistics and finance.
Today the group is the 19th-largest conglomerate in Korea excluding state-owned companies. Dongbu has a total of 29 affiliates. The group is strictly controlled by professional chief executives, and its businesses are categorized into three major fields: manufacturing, services and finance.
Under Chairman Kim, each industry has a vice chairman overseeing general operations and chief executives in charge of individual businesses. This management system allows chief executives to assume more responsibility for the projects that they are in charge of. It was created by Chairman Kim, who has won an award for best business management from the Korean Academic Society of Business Administration in 2008. He targets practical management, focusing on strengthening and improving internally rather than making policy a slave to external growth.
Kim does not even have a team of secretaries, much less a personal assistant. He directly communicates with his subordinates by inviting field workers to top official meetings and by heading down to the shop floor to check the progress of individual projects. This year Chairman Kim is trying to overcome the economic crisis through aggressive business expansion, including establishing a new marketing team at Dongbu Steel that will exclusively work on exporting the company’s steel products. Overseas shipments of the company’s steel used in manufacturing canned beverages rose 20 percent in January year-on-year.
Kim also values experience, often saying that true, mature business management only comes after the age of 50. This is why the average age of his top staff is 60.4 years, far older than in other major conglomerates in the country. Since he had to start his business on his own and scout top talent in fields he was unfamiliar with, the chairman places a great deal of importance on the autonomy of his chief executives, and relies on them to make good decisions in their areas of specialization.
This tradition continues even today.
Chairman Kim has a reputation for being quick to hire capable talent.
In recent years, Dongbu in particular has been scouting Samsung officials as they are well trained in an effective management system that is appropriate for global businesses. According to the company, among 200 high-level officials at Dongbu, 120 are former employees of the Korea’s leading conglomerate.
In addition, many of the high-level officials are graduates of top schools including Seoul National, Yonsei and Korea universities. The chairman himself attended Kyunggi High School, one of the leading high schools in the country, and earned his bachelor’s degree in economics at Korea University.
Earlier this year Dongbu experienced several reshuffles, as the chairman has focused new emphasis on Dongbu’s future in the high-tech industry. At present two of the three vice chairman positions are vacant. The only seat filled is that of Services Vice Chairman Yim Dong-il , who is in charge of overseeing all the service divisions including Dongbu Corporation and Dongbu Express.
Yim is known in the industry as the mastermind behind the development of the apartment brand Centreville, which targeted a more sophisticated and luxurious apartment design than its Korean peers. A former chief executive at Samsung Techwin, Yim joined Dongbu in 2005.
The heart and soul of the group is Dongbu Corporation. The construction division is steered by two chief executives, Lee Soon-byung and Kim Yong-sik. Lee, who is in charge of civil engineering and plant construction, has been a Dongbu employee since 1974. He is an expert in civil engineering and technology development as he has worked in the field for 30 years. Lee’s business management focuses on gaining competitive advantage through new technology development and on winning larger public orders. Kim Yong-sik, chief executive in charge of housing construction, was a former employee at Daelim Industrial who joined Dongbu in 2005. Kim is known for his strong leadership, which helped sell all 1,681 units of Dongbu Centreville apartments amid a challenging market in 2007. He is also credited with raising the brand power of Centreville.
Choi Heon-ki, chief executive of Dongbu Express, a logistics and transportation business unit, joined the company around the same time as Lee Soon-byung. Choi has a reputation for being competitive and aggressive. He is known to have raised the brand value of the group’s logistics business, which is under the service wing.
Choi’s marketing helped make Dongbu’s rental car service third in the domestic market and allowed the company to expand into various new service industries, including taxis and door-to-door delivery services at home and abroad. With his efforts, Dongbu Express has shown exceptional revenue growth.
The manufacturing division of Dongbu Group has recently seen a significant change, as the chairman is emphasizing expansion of its memory chip sector.
Jang Gi-je, former vice chairman of finance, was recently transferred to the vice chairman of Dongbu HiTek, the group’s semiconductor and agricultural goods manufacturer. Jang is a former Bank of Korea official and an expert on international finance and foreign currency management. He joined the group in 1997. Jang is said to possess solid strategic planning skills, which should help the group push forward with its semiconductor business.
Han Kwang-hee, chief executive of Dongbu Steel, is a steel expert who once headed Posco’s Tokyo office as well as Posco C&C, an affiliate of the nation’s leading steelmaker. At Dongbu Steel he hopes to open a steel plant in July this year to produce 3 million tons of hot-rolled steel sheets.
Park Yong-in is the executive in charge of the semiconductor division at Dongbu HiTek. Park, like Jang, was positioned to strengthen this division, which specializes in the manufacturing of integrated devices and in wafer foundries. Chairman Kim is hoping to strengthen the company’s display chip development. Park, a former employee at LG Semiconductor and Texas Instruments, joined the company in 2007 and opened its new display department.
Park also led the team that worked on the first LDI to be developed in house at Dongbu. An LDI is a control chip used in LCD displays.
Cha Dong-cheon is the chief executive of the HiTek agricultural department, which manufactures fertilizer and environmentally-friendly chemicals. Cha comes from a background at Samsung and has also headed Hansol paper. Cha has raised the value of Dongbu’s agricultural products through aggressive sales and marketing.
In the financial sector, Kim Soon-hwan, chief executive of Dongbu Insurance, is a well known insurance expert whose expertise was built over 35 years in the industry. He is a former vice president at Samsung Fire and Marine Insurance. He has doubled the assets of the company through powerful business strategies.
Before joining Dongbu Life Insurance, Cho Jae-hong worked at Samsung Life Insurance executive director in marketing and customer support. As a result, Dongbu Life Insurance won an award for best customer evaluation from the Financial Supervisory Service in April 2008.
By Lee Ho-jeong Staff Reporter [ojlee82@joongang.co.kr]
with the Korea JoongAng Daily
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