Their business: to delight all five senses

When it first started, Orion was just a simple confectionery.

But today it has grown into an overall entertainment provider with diverse business areas from food, films and family restaurants to sports betting. Its goal is to become a conglomerate that not only entertains the tongue but the other four senses as well.

Orion’s story begins in 1956, when Tong Yang Group founder Lee Yang-gul bought Pungguk Confectionery and renamed it Tong Yang Confectionery Industry. That subsidiary broke off from the group in 2001 and set out to expand under the command of Chairman Tam Cheol-kon.

Since then Orion has been aggressively expanding overseas in China and Russia, launching premium food brands such as Dr. You, whose health bars and snacks have seen exceptional growth since their debut last year.

The conglomerate even transformed into an entertainment group, starting its own cable channel, movie distributor and family restaurant in the 1990s.

Under the Tong Yang Group in the 1990s, Orion’s revenue was around 180.8 billion won ($144.1 million) every year. But as an independent conglomerate Orion has grown to hold 35 companies including overseas affiliates, generating revenue of 558.43 billion won and operating profits of 31.89 billion won last year.

Chairman Tam was originally a regular employee who joined Tong Yang Cement, which later became the heart of Tong Yang Group, in 1980. He took over management of Orion after marrying Lee Hwa-kyung, the second daughter of the founder.

The chairman’s abilities reportedly started to surface when he was appointed vice chairman of Tong Yang Group in 1993. Tam decided to slim down the number of confectionery brands and concentrate on the core business.

After whittling the brands from over 200 down to 60 or so, the conglomerate was able to raise the competitiveness of some of its products.

Chairman Tam calls these methods “smart management” - throwing away 80 percent of brands that aren’t working in favor of the main 20 percent. The chairman also reportedly has a keen interest in future business growth, particularly during periods of economic downturn.

Tam is known to promote employees based on their expertise in the fields rather than on their academic backgrounds.

In fact, all of the top managers in Orion’s confectionary departments have been with the company for almost two decades, and many are experts in marketing. These are men who joined the company fresh out of school. There’s even an executive with only a high school diploma.

The heads of all three of Orion’s media companies have a background in media. One is a former journalist.

Beside the chairman, the most influential figure in the conglomerate is Kim Sang-woo, chief operating officer and president of Orion Corp. Kim is a marketing expert who has been with the company since 1987. It was his idea to put taazo, thick paperboard used in a children’s card game, in snacks in the mid-1990s. The idea was an instant hit. Also, Kim helped the company’s potato chip snack Pocachip take first place on the national market. Kim’s most recent project is the Dr. You brand of health-oriented snacks.

Overseas operations have played a significant role as Orion takes in roughly one-third of its overall revenue outside Korea. In its quest to establish a household brand image on the global market, Orion has been setting up operations spearheaded by longtime employees in Russia, China and even Vietnam.

Song Jeong-seop, chief operating officer and executive vice president of Orion Food Russia, joined the company in 1982, working in the accounting office. He has been the representative to the company’s Russian division since 2008.

Kim Heung-jae, chief operating officer and president of Orion Snack Co., the Chinese unit, is another marketing expert. He nurtured the affectionate image of Orion’s Choco Pie product and has been in charge of the Chinese unit since 2001. During Kim’s reign, Choco Pie has risen to account for 70 percent of the packaged pie market in China. Kim is targeting 1 trillion won in annual sales by 2013. Every year, the Chinese office exceeds its sales targets by more than 20 percent.

Lee Kyung-jae, chief operating officer and vice president of Orion Food Vina, the company’s Vietnam operation, is the only executive without a college degree.

Yet he is an expert salesman, doubling the company’s sales in Vietnam in the first year after he was promoted to take charge.

Cheong Byeong-yoon, chief operating officer and executive vice president of Orion Snack International, is currently in charge on the production of snacks including Pocachip and Swing Chip. His workers say Cheong is known for his attention to detail.

Since the mid-1990s Orion Group has been preparing to enter the media and film business, starting with purchases of cable television companies left struggling by the financial crisis of the late 1990s.

Chairman Tam’s wife, the founder’s second daughter Lee Hwa-kyung, reportedly takes an active role in the conglomerate’s entertainment business.

Kim Sung-soo, chief operating officer of and vice president of Onmedia, has made significant contributions over the years to establishing Orion’s media businesses.

A former advertising man who once worked for Cheil Worldwide, Kim was one of the consultants that advised Orion to advance into the entertainment industry as its new growth engine. It worked, and Kim soon joined Orion and helped establish Tooniverse, its first cable broadcast channel.

Kim’s efforts also led Orion to buy the cable network Catch On, to launch On Media, to attract massive investment from Time Warner Korea, license the music channel MTV and more. He is currently one of the central figures in the conglomerate’s entertainment unit.

You Jeong-hun, chief operating officer and executive vice president of Mediaplex, is a long-time expert on media who worked in the advertising industry for over 15 years at LG Ad. He joined Orion’s film distributor in 2005 and was promoted to chief operating officer last year. He is known for his marketing skills, helping promote movies the company invests in, including this year’s hit, “A Frozen Flower,” and past hits such as “Welcome to Dongmakgol.”

Park Dae-ho, chief operating officer and vice president of Sports Toto, is the only top manager who has a background as a journalist. Park was a senior reporter covering business news for Kyunghyang Daily News.

In 2002, Park joined the sports betting pool operator, which was brought from Tiger Pools in March 2003 at the price of 54 billion won.

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

[ojlee82@joongang.co.kr]]

Orion Corp. holds meetings with executives and employees regularly to develop ideas for premium brands. Provided by the company