KoreaToday Doosan Aims to Join Fortune 200 by 2020
Korean Group Jockeys to Chalk Up Fast Growth
By Kim Tae-gyu
Staff Reporter
During the second decade of the new millennium, Doosan Group is striving to join the ranks of the world's biggest 200 corporations by vehemently tapping into global markets.
As the first step in achieving their ambitious goal, Doosan aims to rack up double-digit growth this year both in sales and profitability. The company is one of the country's largest conglomerates.
``We will put forth efforts to earn 24.4 trillion won in sales and 1.6 trillion won in operating profits this year,'' Doosan Group Chairman Park Yong-hyun said at a press conference held last month in Yentai, China.
``Toward that end, we will attempt to increase our overseas business, which accounted for about half of our earnings in 2009. We hope to raise the proportion to as high as 60 percent in 2010.''
Doosan has yet to officially compile the 2009 performance of its 27 subsidiaries, but its sales and operating incomes are estimated to be in the neighborhood of 21.4 trillion won and 800 billion won, respectively.
Based on these numbers, Doosan would record a 14-percent growth in sales while doubling its operating profits should the Seoul-headquartered chaebol successfully attain the goal set by Chairman Park.
Naysayers might claim that the target is overly ambitious but Park makes it clear that Doosan actually has far more ambitious aspirations.
``We could confirm the potential of Doosan while going through the unprecedented global financial crisis last year. We will continue to strengthen our competitiveness by beefing up internal capacities and financial health,'' Park said.
``On the back of such strategies, we will jockey to be a Fortune 200 company by the end of this decade.''
Unique Competitiveness
In order to achieve the 10-year objective, Park iterates the significance of nurturing a competitive edge. This is especially the case when the economy faces big uncertainties as it does now, the doctor-turned-CEO said.
``Predictions for the economy in 2010 are still mixed. Uncertainties linger everywhere. Some predict a turnaround, while others warn of a double-dip recession,'' Park said in a new year's message early this month.
``When business conditions are uncertain, we must arm ourselves all the better with a competitive edge that is unique to Doosan to help us through any possible market difficulties. Our primary strategy for 2010 must focus on boosting competitiveness unique to Doosan.''
To obtain the unparalleled competitive advantage, Park, who once headed a national hospital, is fixing his gaze beyond national borders.
``There is no question that today, our primary field of operations is the global market. Collectively, we will earn over 60 percent of our aggregate sales overseas. This is the result of our tireless push into new markets throughout the 1980s and 1990s,'' Park said.
``Although this was the right focus at the time, we must now pursue selection and focus for the sake of value creation. We must maximize synergistic effects through efficient integration with our overseas affiliates.''
Park is also urging the group to redouble its efforts to advance into emerging economies such as Russia and Latin American countries by employing customized strategies in each market.
Global Doosan
Inorganic growth has been one of the major pillars in Doosan's expansion philosophy as the group has extended its business horizons through international mergers during the past decades.
Included in its recent acquisitions are global players such as Bobcat, Doosan Babcock and Skoda Power.
Bobcat is a U.S.-based manufacturer of farm and construction equipment, which was taken over by Doosan midway through 2007. It boasts of established brand power in the international scene.
Doosan Babcock has expertise in the power generation and petrochemical industries while Skoda Power is a Czech power plant equipment maker that specializes in turbine technologies used in power plants.
To become a genuine global powerhouse, however, Park points out that Doosan also has to chalk up organic growth, which refers to expansions on the back of internal capacities.
``We must make ceaseless efforts to improve our operational efficiency and profitability by securing the capacity for organic growth,'' said Park, who took the reins of Doosan early last year.
``We must also reinforce our global organizational structure and systemic competence. In order to ensure the expansion of our global operations, we must acquire and cultivate talented human resources based on the framework of the 2G strategy.''
The term 2G refers to the simultaneous growth of a business and its employees, a strategy geared toward generating a cycle in which the gains of Doosan's business backs up the development of its workers and vice versa.
Currently, around 35,000 employees work for Doosan in 30-plus countries across the world.
``We always feel excited when starting a new year, but we at Doosan have a particularly special reason as we embrace this year's beginning. The year 2010 is the start of a new decade,'' Park said in a new year's message.
``With the great transformation and growth of the last decade, we look forward to a new chapter in our history, one in which we hope to make another great leap forward.''