Doosan realigns business portfolio

Group considers buying OLED maker Novaled

By Kim Yoo-chul

Park Yong-maan Doosan Chairman

Doosan Group, the nation’s oldest conglomerate, is enhancing its electronics unit in an attempt to diversify its business portfolio.

Group officials and stock market analysts identified electronic components, biotechnology and parts for oil pressure devices as some of the group’s likely areas of interest.

It plans to invest as much as 250 billion won over the next three years in these untapped businesses, according to the sources.

The group plans to spend 190 billion won of the 250 billion won to beef up its electronics business.

This business exports copper clad laminators, which are used in electronic devices, to leading companies such as Samsung Electronics, LG Electronics, Apple and Sharp Electronics. It is also considering taking over a small display maker for a similar purpose.

The move comes a year after Park Yong-maan became chairman of the group on April 2, 2012.

The group’s core businesses have witnessed deteriorating profits over the last few years owing to market uncertainties. Park hopes that by beefing up the unit, he can set the group on a more favorable course.

“Doosan’s acquisition of Bobcat proved a success as the U.S.-based firm has been generating profits thanks to its brand recognition in key markets. But we believe Chairman Park has shifted his focus to small acquisitions to further improve the group’s growth,” said Kim Il-tae, a fund manager at Taurus Investment & Securities in Seoul, during a telephone interview.

Spokesman Lee Jay-hyung said the group is interested in buying Novaled, a German producer of organic light-emitting diode (OLED) displays, but offered no further details.

OLEDs are advanced displays used in electronic appliances such as tablets, smartphones, cameras, PC monitors and televisions.

In addition to being a leading OLED developer and manufacturer, Novaled commercializes related technologies and materials, which, according to sources, is an area that Doosan aims to grow.

“As far as we know, Doosan’s interest in acquiring Novaled makes sense considering Chairman Park’s appetite for patents in new businesses. Buying patents is required if a firm wants to expand its presence in electronics-related businesses,” said another fund manager from a U.S.-based investment bank in Seoul during a telephone interview.

The group also plans to invest more in its biotechnology-related businesses, in line with a trend seen among leading local conglomerates.

According to sources, this investment will be made in the areas of plant construction and expansion of related equipment for its biotechnology businesses.

The group is also streamlining to adapt to fast-changing market situations. For example, Doosan Heavy Industries’ profitable heat recovery steam generator (HRSG) division was moved to Doosan Engineering and Construction (E&C) to create better synergy and facilitate faster decision making.

By diversifying its businesses, Park plans to turn Doosan into a global top 200 company. He is also known for frequent communications with young employees and human resource development personnel.