Doosan to raise overseas affiliates by 30

By Kim Yoo-chul

Doosan Group is planning to increase the number of its overseas affiliates by 30 in the next three years as the industrial giant is keen to create more revenue from international markets.

The group’s key units include Doosan Heavy and Infracore, whose core business fields heavily rely on business-to-business (B2B) areas not those related to business-to-consumer (B2C), pushing Doosan to invest more for overseas projects.

Doosan’s top priority is to bolster its presence in emerging markets, not developed markets such as the United States and Europe, company officials said.

``Doosan will add 30 overseas affiliates by 2014, capitalizing on Brazil, India and China as we need to spur localization strategies for corporate expansion,’’ said group spokesman Lee Jay-hyung, Friday.

``Mergers and acquisitions (M&A) was the group’s top word and localization is the new one,’’ said Lee. By August this year, Doosan has 121 overseas affiliates from 115 last year, according to data provided by the conglomerate.

The Seoul-based corporation is aiming to reap 27.7 trillion won in revenue this year and Lee said over 60 percent of the projection is expected to come from international markets.

Doosan bought Ingersoll Rand’s Bobcat units, representing one of the largest foreign purchases by a South Korean company.

A series of overseas purchases are a big jump for Doosan into the general industrial business, where it has interests in such products as heavy construction equipment and diesel engines.

Doosan’s drastic corporate emergence is quite worth noting because the `Bobcat deal is the strongest example yet of Korean firms playing in the global mergers game.

Korean conglomerates are heavily dependent upon their reliance on organic growth rather than acquisitions for going global.

Previous noticeable attempts by Korean firms in the past just include Samsung’s purchase of U.S.-based PC maker AST Research and LG Electronics’ purchase of U.S. consumer maker Zenith Electronics ― both small deals two decades ago.

Doosan’s new plan comes after its top decision makers that include its chairman Park Yong-maan reached a consensus to add fine-tuned decoration to its overseas strategies.

``Because our money-making portfolios are focused on B2Bs, acquisitions were strongly needed for another corporate jump. Now, we believe that groundwork has been done,’’ said Lee.

Doosan let non-Koreans take control of its human resources and accounting and be chief executive of Doosan Infracore in accordance with the group-wide initiative for global markets.

``With technologies that we’ve learned from acquisitions, we will be more aggressive for corporate growth in markets that are very lucrative and have strong growth potential,’’ added Lee.

In June this year, its electronics division established an affiliate in Jiangsu Province, China. Also, Doosan Heavy set up a unit in Chennai, India, to boost the output of coal turbines.

Desalination-, plant-, construction equipment-, and turbine-related businesses are Doosan’s critical earnings drivers.

These projects are categorized as infrastructure-driven that need financial support from governments especially in emerging markets, according to Doosan officials.

Doosan is aiming to become one of the world’s top 200 companies by 2020. It been placed 471st in the Fortune 500 in 2009. It’s been included in the Forbes Global 2000 companies from 2007.

``More revenue will come from overseas next year, though we’ve been engaged in detailed internal talks to fix up the exact target numbers,’’ Lee said.