For poultry processor, a cachet of trust is an antidote for crisis

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For poultry processor, a cachet of trust is an antidote for crisis

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Kim In-sik

Although the foot-and-mouth crisis that ravaged the peninsula since late last year was declared over in March, aftereffects continue to plague farmers and companies. Demand for domestic beef has flagged, while the price of pork continues to reach record highs.

Kim In-sik, the CEO of Korea’s third-largest poultry processor Cherrybro Co., knows something about disease outbreaks that threaten the existence of meat processing firms. Due to a similar circumstance in 2003 when there was an outbreak of avian influenza, Cherrybro was one of several poultry firms to file for court receivership.

However, the firm also holds a record for the fastest turnaround in the industry, graduating from court receivership in just 21 months. In an interview with the JoongAng Ilbo, Kim sketched out how he plans to overcome the lingering effects of foot-and-mouth disease in Korea’s meat processing industry. “The foot-and-mouth disease crisis is not necessarily the end of [our] company,” said Kim.

Cherrybro, which trails behind Harim and Maniker with a 9.6 percent share of Korea’s processed poultry market as of 2009, reported solid earnings last year with revenues of 208.3 billion won ($193 million), operating profits of 12.9 billion won and some 52.53 million chickens processed.

Kim, a veteran in the agricultural product processing field since serving as the head of what is now Daesang Pamsco in the 1980s, struck out on his own to establish Cherrybro in 1991. And in the 20 years since, the firm’s history has been a study in how to keep a business going in the face of ups and downs in business conditions - gaining Cherrybro a reputation for bouncing back from dire crises that have wiped out many other firms.

Having survived the Asian financial crisis of 1997 just six years after its establishment, Cherrybro saw its business boom as demand for chickens skyrocketed beginning in the late 1990s, hitting a peak during the 2002 World Cup held in Korea and Japan.

But despite supply remaining high, demand for chicken dropped to normal levels by the end of the World Cup, creating a chronic overproduction of chicken. Kim recalled Korea’s chicken processors spending the first 10 months of 2003 locked in 10 months of cutthroat competition where chicken was sold at prices lower than production costs.

Although stocks kept piling up, Cherrybro continued to buy chicken from farms with which it had contracts.

“If we don’t buy chickens right when they’re fully grown, farms would have to indefinitely continue spending money on feed,” explained Kim. This caused a back inventory of 3 million unsold chickens to pile up in Cherrybro’s warehouses.

And in December 2003, a final blow came in the form of an outbreak of avian influenza (AI). AI was detected in two Cherrybro hatcheries in Cheonan, South Chungcheong, and Eumseong, North Chungcheong.

The company had to cull some 3 million chickens, the largest amount in the industry.

“The perception that chicken is not safe to eat had spread through society, and our revenues fell to one-sixth of what they had been,” said Kim. “Furthermore, as we faced a crisis, financial institutions we’d dealt with began to call in loans.”

By late 2003, two months before Cherrybro reached the end of its rope, Kim met with representatives of contracted farm owners to reveal that the company was facing insolvency within two or three months - proven true in February 2004 when the firm filed for court receivership, and entered a composition process in May.

In the composition process, an insolvent company that can still pay part of its debt submits a scheme to creditors with a plan to avoid a declaration of bankruptcy. But despite the firm’s insolvency, the credibility Cherrybro had built up when it was plagued by overproduction caused some 250 contracted farms to continue honoring contracts with Cherrybro. The same credibility prompted employees and executives to stay put. Although employees were told they might not get a regular paycheck, all 180 employees stuck it out with the company.

As farms continued to supply chickens, Cherrybro’s clients didn’t withdraw their confidence from the firm. Cherrybro graduated from the composition process in February 2006, only one year and nine months after filing for court receivership.

“That was the fastest turnaround out of composition in the industry,” Kim said. “Because farms and employees didn’t waver in their belief, the business revived itself naturally.”

Even the oversupply of 3 million chickens that had plagued Cherrybro proved to be a boon. As the price of chicken rebounded in 2005 because of the cullings, the company sold off its stock for several times the price compared to the previous year. It allowed the firm a financial platform to escape insolvency.

“As the company survived two crises, the sense of trust among employees was stronger than ever,” said Kim. The lessons learned during the second crisis prompted Kim to sell off unnecessary businesses to focus solely on chicken. Because of this decision, revenues of 87 billion won in 2007 had nearly tripled by 2010.

“There are many farmers who drank away their [FMD culling] compensation because they think short-term,” said Kim. “But only the determination to be true to one’s calling will be enough to survive a crisis.”


By Lee Soo-ki [ebusiness@joongang.co.kr]

한글 관련 기사 [중앙일보]
“부도 날 것” 거래처에 고백한 게 재기 자산돼
김인식 체리부로 회장 위기 관리법

체리부로 김인식 회장이 자신의 집무실에서 닭 모형을 앞에 두고 포즈를 취했다. 체리부로는 2003년 부도를 맞았지만 1년9개월 만에 회사 정상화에 성공한다.

지난해 말부터 전국을 강타한 구제역 사태가 올 3월 일단락됐지만 영향은 여전하다. 한우 소비는 주춤하고, 살처분의 영향으로 돼지고기 값은 연일 강세다. 이런 상황을 지켜보는 닭고기 가공업계 3위 업체인 체리부로의 김인식(69) 회장은 착잡한 심경을 감추지 못했다. 그 역시 조류인플루엔자(AI) 등의 여파로 부도를 경험했다. 그는 27일 본지와의 인터뷰에서 “구제역으로 인한 위기가 결코 사업의 끝은 아닐 것”이라며 말문을 열었다.


김 회장은 대상그룹 계열사인 옛 제일농장(현 대상팜스코) 대표를 지내다 1991년 체리부로를 세웠다. 이 회사는 지난해 2083억원 매출에 5253만 마리의 도계실적을 기록했다. 20년간 사업체를 운영하면서 김 회장은 두 차례 큰 위기를 넘겼다. 사업 초기였던 97년 말 닥친 외환위기가 첫 번째였다. 위기를 넘기고 나니 다시 기회가 찾아왔다. 90년대 후반부터 닭고기 소비가 폭발적으로 늘었다.

 2002년 월드컵 때 정점에 달했다. 회사가 한참 잘나가던 2003년 다시 구렁텅이에 빠졌다. 월드컵이 끝나면서 만성적인 공급과잉 상태에 빠져 닭고기를 생산원가보다 싸게 파는 출혈경쟁이 연초부터 10개월간 계속됐다. 닭고기는 제때 팔리지 않아 재고가 쌓였지만 거래 농가에서 출하하는 닭은 계속 사들였다. 그는 “충분히 자란 것들을 사주지 않으면 이후에는 사료값만 축나기 때문”이라고 설명했다. 공장에는 300만 마리가량의 닭이 쌓였다.

 그해 12월에는 AI가 발생했다. 전국 수백 개의 부화장 중에서 체리부로 소유의 천안·음성 부화장에서만 AI 바이러스에 감염된 병아리가 나왔다. 결국 업계에서 가장 많은 300여만 마리를 살처분했다. 김 회장은 “사회 전반에 닭고기는 먹어선 안 될 것이란 이미지가 팽배해지면서 매출은 평소의 6분의 1로 줄었다”며 “위기에 빠지니 평소 거래하던 금융기관들이 앞다퉈 대출회수에 나섰다”고 말했다.

 부도가 나기 두 달 전인 2003년 말에는 거래농가 대표들을 회사로 불러 “이대로 가면 2~3개월 내 부도가 날 것 같다”고 솔직하게 말했다. 회사는 결국 2004년 2월 부도를 내고 그해 5월 화의에 들어갔다. 회사는 부도를 맞았지만 신뢰를 지킨 덕에 250여 거래 농가를 비롯해 임직원들은 별다른 동요를 보이지 않았다. “월급을 주지 못할지도 모른다”는 사전 통지에도 불구하고 180여 직원 중 외국인 근로자 2명을 제외하고는 모두 정상 출근했다.

 농가들이 정상적으로 닭을 공급하면서 거래처들도 체리부로에 믿음을 거두지 않았다. 화의에선 1년9개월 만인 2006년 2월 벗어났다. 그는 “업계 최단 기간 만에 화의절차를 종료한 것”이라며 “농가와 임직원 모두 딴생각 안 하니 자연스레 되살아났다”고 말했다. 닭 처분으로 공급량 줄어들면서 닭값이 회복된 것도 전화위복이 됐다. 재고가 쌓였음에도 농가를 위해 사들였던 닭들(300만 마리)은 이듬해 수매가의 배 이상으로 값을 붙여 팔아 화의에서 벗어나는 실탄이 됐다. 김 회장은 “두 차례 위기를 넘긴 회사는 어느 때보다 임직원 간의 신뢰가 강해졌다”고 말했다.

 김 회장은 특히 불필요한 사업을 정리하고 닭고기 한 가지에만 집중했다. 덕분에 2007년 870억원이던 매출이 지난해 세 배 가까이 늘었다. 그는 “단기적인 생각으로 술로 보상금을 탕진하는 농가가 많은데, 어떻게든 본업에 충실하겠다는 마음을 다잡아야 위기를 벗어날 것”이라고 말했다.

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