3rd-generation chiefs reorganize conglomerate portfolios

By Kim Hyun-bin

Third- and fourth-generation conglomerate chiefs are reorganizing their company portfolios, selling off unprofitable businesses and double downing on future growth sectors to gain competitiveness and better recover from the economic downturn caused by the COVID-19 pandemic.

Koo Kwang-mo who took the helm of LG Group in June 2018 has been focusing on new growth sectors including AI and robotics while selling off unprofitable businesses.

The chairman recently announced the company would sell off LG Electronics' mobile communications division, which has incurred consecutive losses for the conglomerate for years.

Soon after he was appointed, LG liquidated fuel cell subsidiary LG Fuel Cell Systems, in addition to deciding to sell LG Electronics' Hi-Entech and LG-Hitachi Water Solutions.

LG Group Chairman Koo Kwang-mo

LG Chem's LCD business was also sold off to a Chinese company and LG Uplus sold its electronic payment system unit to a startup company.

Koo has been pinpointing future growth in artificial intelligence, robotics and automotive electronics.

Late last year, LG Electronics and Canada-based Magna International, the world's third-largest auto parts maker, established a joint venture to manufacture e-motors and e-drive systems, to support a growing global shift toward vehicle electrification.

Other affiliates have been enhancing competitiveness in diverse fields with LG Energy Solutions leading the electric vehicle battery industry, LG Electronics and LG Innotek developing vehicle components and LG Display providing the displays.

Kim Dong-kwan takes over key management

Hanwha Group Chairman Kim Seung-youn's eldest son Hanwha Solutions President Kim Dong-kwan have been increasing his oversight in the conglomerate's key businesses including defense and space development sectors.

Kim has been appointed to lead the conglomerate's Space Hub in charge of managing the conglomerate's space development, Sunday. Space Hub has combined several affiliates related to aerospace.

Hanwha Solutions President Kim Dong-kwan

Hanwha plans to enhance collaboration between affiliates, brainstorm ways to maximize synergy effects and enter the satellite communication business. The conglomerate aims to launch satellites through the collaboration of Hanwha Aerospace, Satrec Initiative and Hanwha Systems.

Hyundai's Chung search for future growth businesses

Chung Ki-sun, a member of the Hyundai owner family's third generation and senior vice president of Hyundai Heavy Industries, is leading efforts to conduct M&A deals with Daewoo Shipbuilding & Marine Engineering (DSME) to enhance competitiveness in the shipbuilding sector, and is in the process of acquiring a 35.4 percent stake in Doosan Infracore.

Industry watchers believe a great synergy could take place with the DSME acquisition, with the company starting to pick up steam in procuring LNG ship orders from overseas.

The senior vice president is also speeding up efforts to excavate future growth businesses and last September established a Future Committee, which he is in charge of.

The committee plans to find new growth businesses in the bio, AI, hydrogen and energy sectors.