By Kim Yoo-chul
As the head of Korea’s top-tier conglomerate LG Group Chairman Koo Bon-moo gets lots of media attention. These days his focus is on driving his own initiatives for shared growth with local small- and medium-sized enterprises (SMEs).
Though no formal proposal has been made nor a fully defined policy announced by the Presidential Commission for the Shared Growth of Large and Small Companies, there are ongoing discussions to develop a method of profit-sharing.
While LG seems quite passive about following the government-driven profit-sharing scheme, chairman Koo is vowing as a trusted corporate citizen to create more jobs by partnering with local SMEs.
``LG will enjoy more `first-mover advantage’ in the so-called `green projects’ by securing more patented technologies. LG’s key suppliers and contractors will play significant roles,’’ said Jung Jeong-wook, a senior LG spokesman, Monday.
In a statement, LG said it is aiming to reap 10 trillion won in revenue from “green” businesses and has a plan to create 10,000 new jobs by the end of 2015.
LG has been set to form a united front with 660 local SMEs to effectively push group-wide business initiatives and to better activate balanced corporate growth.
``So far this year, LG formed a partnership with 16 local SMEs in areas such as solar-cells, batteries for electric vehicles for joint research and development (R&D),’’ said Jung, adding supportive budgets for SMEs will be increased further, from the current some millions of dollars.
LG Electronics will invest 1 trillion won by 2014 to construct a complex in Pyeongtaek, for R&Ds in solar-cells and LEDs.
In Poland, where LG has its production cluster, sizable numbers of South Korea-based SMEs participate there in accordance with chairman Koo’s initiatives for shared growth.
President Lee Myung-bak is pressurizing the nation’s top-tier industrial conglomerates to do more for mutual growth with local SMEs for sustainability.
Also, the government recently proclaimed that ``green growth’’ will become the nation’s new vision for overcoming the challenges of climate change and a looming carbon-based energy crisis, while still maintaining economic growth.
LG plans to invest 8 trillion won or some $7 billion in ``green businesses’’ such as electric vehicle components, LED lighting and sewage treatment industries by 2015.
And this is the first time for LG Group to fix its mid-term plan for corporate growth at a time when the group’s key affiliates were being downsized due to late entry in smartphones and sagging demand for consumer electronic devices.
LG is planning to invest 2 trillion won in electric vehicle batteries by 2013, 1 trillion won in the photovoltaic, LED and water treatment sectors and 490 billion won in the polysilicon business by 2014.
Separately, an additional 400 billion won was also being set to build facilities to make solar cell wafers on a sequential basis by 2015, according to the statement.
Key details include a plan to boost an annual output of batteries for electric vehicles to 350,000 units by 2013 from the current 100,000, a plan to significantly increase the annual output of solar-cells to 1 gigawatt by 2014 from the 330 megawatt as of the end of last year, the statement said.
South Korea’s version of green growth is defined as ``growth achieved by saving and using energy and resources efficiently to reduce climate change and damage to the environment, securing new growth engines.’’