The panoramic view of construction site of GS Caltex’s No. 3 Heavy Oil Upgrading (HOU) facility in Yeosu, South Jeolla Province. When completed, it will transform heavy oil into high value adding light oils like gasoline.
/ Courtesy of GS Caltex |
By Yoon Ja-young
Staff Reporter
 GS Group plans to be more aggressive this year, targeting a 10-percent increase in sales and investing 2.3 trillion won.
``Customers have turned more sophisticated, and the value creating system is changing upon organic interdependence between science and culture and among regions,'' GS Group Chairman Huh Chang-soo said in a New Year's speech.
``The customers and the market have changed a lot during the past decade, and we've seen challenges and opportunities which were not available in the past,'' the chairman said, calling for the group to secure a new growth engine.
As part of an effort to secure this, GS Group is planning to invest 2.3 trillion won this year, continuing its over 2 trillion won in investments each year since its launch. The group plans to concentrate its efforts in core businesses such as energy, retail and construction, and dig up new business opportunities through GS Global which it acquired last year. It is targeting 50 trillion won in total sales this year, up 10 percent from the last year.
Innovation After Innovation
The chairman said GS should make innovation after innovation, at a much quicker pace. In new energy and environmental businesses, Huh said that the group should narrow its targets to accelerate the process of reaching the new growth engine.
More specifically, GS Caltex, the group's energy subsidiary, aims to become the most profitable energy services company in Asia Pacific.
GS Caltex had its management objective for 2010 as a ``Bridge to the Future,'' strengthening its previous businesses and focusing on new growth engines, with the year 2010 becoming a bridge to attain the group's vision.
Its Chairman Hur Dong-soo said that GS Caltex should continue making profit in its core petroleum, petrochemical, and base oil businesses. Meanwhile, it will dig up new growth engine in new businesses such as fuel cells, carbon materials and resources development.
More concretely, GS Caltex will focus on enhancing cost competitiveness, optimizing production and operation facilities and setting up the basis for new growth businesses.
To meet these objectives, GS Caltex optimized the process of buying crude oil, and refining and sales. It also is trying to maximize competitiveness in production in the petroleum and petrochemical businesses through timely facility investment.
Expanding exports, developing oil fields overseas, expanding gas station business in China, and doing research and development (R&D) in the petrochemical, new energy and new materials sectors are also part of its core strategy.
GS Seeks Model Business in Retail
In retail, GS Group Chairman Huh Chang-soo called for a business model that could lead to changes in customers.
GS Shop plans to secure its position as the leading company in the sector, strengthening customer oriented marketing and setting up a growth plan for the mid- to long- term.
It plans to organize and set up its brand identity in the whole process ranging from product sourcing to sales and services.
GS Shop will provide effective sales channel for good products, and increase investment to help small- and medium-sized business partners upgrade their quality and services.
It will also focus on strengthening global sourcing, and upgrading the quality of products sold through home shopping.
The unit currently has various sales channels, such as TV homeshopping, Internet shopping and catalogue. It will seek to create synergistic effect between these channels. GS Shop is eying T commerce as well, a digital new media.
The retail subsidiary will make aggressive investments overseas this year. Its business in China is now stabilizing, and the firm expects to attain a surplus. This goes hand in hand with Huh's belief that globalization should be coupled with localization. It includes localizing in global markets, cooperation between regions, and the global use of local resources.
GS Shop was the first local home shopping to advance into the Indian market. On top of applying the know-how of GS as the leader in the Korean market, one of the most developed homeshopping markets in the world, it also plans to introduce products made by small- and medium-sized Korean firms, to enhance the product lineup of its Indian home shopping business.
Green Growth Keyword for GS E&C
For GS Engineering & Construction (GS E&C), the construction arm of GS Group, the keyword is green growth.
The firm has already set up a strategy for its green growth business in 2009, and this year will implement the plan.
The construction company is preparing green home and green building businesses, which incorporate energy efficiency technology, renewable energy, and smart grids.
It also plans to strengthen its network with business partners. The company signed an MOU with LS Industrial System, GS Fuel Cell, to seek cooperation in green growth areas. GS E&C is closely working with businesses and institutions in the United States, Japan, China and Denmark regarding R&D.
GS plans to advance into renewable energy generation sector this year, where fossil fuels will be replaced by environment friendly energy generated by the sun, the wind or the sea.
It is also scheduled to invest in R&D in most cutting edge sectors such as integrated gasification combined cycle (IGCC) power plants, and carbon capture and storage (CCS).
GS is trying not to miss the changes in the market and trends in technology.
Synergy Between Subsidiaries
On top of the growth strategies of each subsidiary, GS focuses on synergistic effect between them. ``The center focusing on one business model can't solve the complicated tasks of our time. We should guarantee diversity through a cooperative model, and make the most of our resources,'' Huh said.
The chairman added that growth should be friendly. ``We should seek new market opportunities that are environmentally and culturally friendly as customers' interest and needs are changing,'' he said.
He stressed an open culture at the company. ``The numerous ideas and passion coming from the bottom-up should invigorate the company,'' the chairman said.
chizpizza@koreatimes.co.kr
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