중앙데일리

60 years of helping Korea feel pretty

[The faces inside KOREA’S CONGLOMERATES: AMORE PACIFIC]

Apr 20,2009
Suh Kyung-bae (46)
  • Amorepacific and Pacific Corp. CEO and president
  • Bachelor’s degree in business management, Yonsei University
  • Master’s degree in business

  • Ask any Korean woman on the street what kind of cosmetics she wears. Chances are she’s carrying at least one item made by Amorepacific, the largest cosmetics company in Korea.

    For more than six decades, the cosmetics giant has been part of the Korean woman’s age-old struggle against wrinkles, sags, bags and blemishes.

    Starting out as a small cosmetics house in 1945, Amorepacific has now grown into Korea’s largest, with sales of more than 1.5 trillion won ($1.1 billion) last year and nearly 20 well-known cosmetics lines catering to women in Korea and elsewhere in Asia and the world.

    Now the company, one of a few Korean firms that have managed to stay on top of their respective industries since the beginning, is aiming to become one of the globe’s top 10 cosmetics giants by 2015 by cementing its presence in Asia, the United States and Europe.

    The history of Amorepacific dates back to the 1930s, when the firm’s late founder Suh Sung-whan learned cosmetics production techniques from his mother, Yoon Dok-jeong, in Kaesong, a city now in North Korean territory. Suh opened a small cosmetics firm under the name Taepyeongyang (Pacific) Chemical Industrial in downtown Seoul in 1945. Business boomed even during the upheaval of the Korean War. The company opened in 1954 the first Korean cosmetics research lab and started sending workers to Germany, Japan and other countries to study.

    During the “miracle on the Han River” in the 1960s and ’70s, demand from Korean women for creams, lotions, powders and lipstick to enhance their looks also exploded.

    By the late ’60s, sales by Amorepacific accounted for nearly 70 percent of the local cosmetics market. The firm even set up a production plant in France in 1990 and started operations in China five years later.

    But Amorepacific increasingly faces challenges from intensifying competition with local rivals and from an unfocused set of subsidiaries including a fashion brand and even a stock brokerage. The company faced a major overhaul as the founder’s second son, Suh Kyung-bae, started taking over management in the early 1990s. Suh spearheaded the company’s dramatic restructuring plan, selling or shutting down many divisions, including the brokerage, fashion house, baseball team and basketball team, and pledging to focus on the company’s raison d’etre: the beauty business.

    Under Suh’s leadership, which officially began in March 1997, the company has shown robust growth, with sales snowballing from some 500 billion won in 1997 to more than 1.5 trillion won in 2008.

    Amorepacific President Suh Kyung-bae and actors Song Hye-kyo and Jang Dong-keon put an envelope with donations into a box to celebrate the company’s “pink ribbon marathon race” in October.
    Now its cosmetics brands are loved by Korean women of all ages, as lotions, lipsticks and mascaras from youth-oriented lines like Laneige, Mamonde, Etude and Innisfree grow popular among the young while anti-wrinkle creams from its upscale brands such as Sulwhasoo have become must-have items for middle-aged women.

    In 2006, the company adopted a holding company corporate structure, with the Pacific Corp. encompassing subsidiaries including Amorepacific, Pacific Glas, Jangwon and Pacific Pharmaceuticals.

    The flagship unit Amorepacific sells various skincare and makeup lines, healthcare brands and other personal care brands, while Pacific Glas is in charge of producing bottles and containers for cosmetics products.

    Pacific Pharmaceuticals produces anti-inflammatory, antacid and other medicines for diabetes, circulatory diseases and hepatitis. Jangwon is a Jeju-based producer of green tea products, a longtime passion of the company’s late founder.

    No women have yet made it to the top management level of the company, even at a cosmetics firm largely catering to women, in yet another example of Korea’s conservative, male-dominated corporate culture. But the firms says there is hope, with several females in executive director-level positions aspiring to enter the top executive level at the cosmetics titan, where females account for more than half of the workforce.

    Suh has taken the lead in the group’s ongoing efforts to cement its presence in cosmetics and personal care markets both in Korea and abroad. The 46-year-old, though long considered the heir of his father, the firm’s founder, undertook key positions at the company over a period of 10 years before officially taking the helm.

    During Suh's tenure over the past 12 years, Amorepacific has managed to catapult itself into the global cosmetics limelight, with overseas sales of about 234 billion won, accounting for more than 15 percent of total sales in 2008. Suh hopes to lift that figure to 1.2 trillion won by 2015. The company currently operates 15 overseas units in countries including the United States, France, Japan and China, and Suh hopes to increase the firm’s total sales to 5 trillion won in the next six years.

    Choi Hyung-keun, the 53-year-old executive vice president of Pacific Corp., is in charge of handling the entire group’s business portfolio and strategic management. Choi has held key positions at the company, from product development and marketing to cosmetics container production.

    Shim Sang-bae, an Amorepacific executive vice president, is in charge of the firm’s supply chain management and overall production. The 55-year-old has witnessed the firm’s rise and been through tough times since he entered the company in 1980. He was once in charge of customer satisfaction and logistics.

    Bae Dong-hyun, Amorepacific’s executive vice president in planning and finance, has long overseen the company’s finances and cash flow. The former commander in the Korean special forces was also the point man during the group’s transition into a holding-company structure in 2006 and is currently supervising the firm’s finances, strategies, planning and IT.

    Kwon Young-so, Amorepacific’s executive vice president in counseling sales, once spearheaded the firm’s efforts to gain a foothold in the Chinese market, helping the Laneige brand grow popular among Chinese consumers. He is also overseeing the firm’s various distribution channels including department stores and door-to-door sales.

    Participants in the race, which Amorepacific has organized since 2001, helping raise 1.1 billion won, look on. Provided by the company
    Yang Chang-soo, Amorepacific’s executive vice president in marketing, was also in charge of the firm’s Etude line, a budget cosmetics line targeting young women.

    Kang Hak-hee, Amorepacific’s executive vice president in charge of the firm’s research and development center, was behind the development of Iope retinol cream, one of the most well-known and best-selling anti-wrinkle cosmetics in Korea. The chemical engineering major entered the company in 1981 and headed up production at the firm’s factory in France from 1990 to 1994.

    Lee Sang-woo, Amorepacific’s executive vice president in charge of international business, is at the forefront of the firm’s efforts to go global and solidify its presence in overseas market, especially in Asia, where he hopes to garner sales of 500 billion won by 2012. The international sales expert has been at the firm’s overseas sales unit since 1981.

    Lee Yoon, the 53-year-old former managing director at the firm’s cosmetics research lab, is now Amorepacific’s senior vice president for human resources and support service.

    Lee Woo-young, Pacific Pharmaceuticals’ chief executive officer, led the development of the drug maker’s flagship hit Ketotop, a household-name drug here for joint and bone pain for the middle-aged. The 56-year-old spent more than two decades as a medical lab researcher for the company before taking the top seat at the drug unit in 2001.

    Kim Dong-young, chief executive of Etude, also worked on the makeup brand’s new project to penetrate foreign markets in Vietnam, Taiwan, Singapore and China.

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


    By Jung Ha-won [hawon@joongang.co.kr]



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