 Doosan Group has boosted its international portfolio through a series of mega deals won by its key affiliates. Seo Dong-su, left, vice president at Doosan Heavy, shakes hands with Salah Hussein Al-Awaji, chairman at SEC’s board, after Doosan won a 4-trillion-won deal from SEC to build a power plant in Saudi Arabia. The deal is the biggest ever for a local company in the sector. / Korea Times file |
Light-industry conglomerate turns into heavy-industry cluster By Kim Yoo-chul
Doosan Group ― the nation's oldest conglomerate whose key business areas range from construction, desalination, power plants to heavy equipment ― is set to further raise its international profile by using the upcoming G20 summit as the right forum for its future.
Group officials say its chairman Park Yong-hyun is planning to hold several strategic meetings with high-profile executives from international companies as the business summit is crucial for Doosan to boost its corporate brand awareness.
"Doosan is planning to use the business
summit as a springboard to raise our international presence," said a senior group spokesman Shin Dong-gyu, Monday.Doosan, which has recently struck a series of sizable acquisition deals in the United States and the Czech Republic, is aiming to create 15 trillion won ($12 billion) in sales outside the peninsula this year.
That's some 60 percent of this year’s total sales target of 24.4 trillion won, according to Shin.
Doosan's key affiliates have about 4,100 sales networks in 35 countries from the United States, the United Kingdom, Romania and China to emerging Asian countries.
Doosan has already announced that this year will be the `starting point’ to foster our profiles in
emerging markets such as ``Russia and countries in South America, leading us to pay more attention to the upcoming business summit,’’ Shin said.Shin, however, declined to comment on unveiling next year’s sales and operating profit targets overseas, as it would be premature to publicize the details.
The firm’s chairman is showing clear signs of activity at the business summit despite a tight schedule.
Chairman Park Yong-hyun will discuss issues of healthcare and Africa in the corporate social responsibilities (CSR) session as one of the key debaters.
``Chairman Park will also talk about Korea’s role in the development process of one of the top emerging countries and some of the next steps,’’ Shin added.
Over 110 global business executives will attend November’s G20 business summit in Seoul, which will run two days on November 10 and 11.
Expansive but cautious
Doosan Group has seen a rapid corporate external growth over the last few years mainly because of its wins for mega overseas acquisition deals.
The parent company Doosan Group paid $4.9 billion for Bobcat _ the world’s top compact construction equipment maker _ and two other units from the U.S. conglomerate Ingersoll-Rand in 2007.
Its power plant and engineering unit Doosan Heavy Industries & Construction also bought businesses from AES, a U.S.-based electric power maker, in 2005 and Mitsui Babcock Energy in 2006 to raise its oversea profile.
Last year, it bought Czech-based turbine maker Skoda Power.
Such aggressive accelerations towards international markets have just begun yielding some constructive results. In 2007, the group was listed on the ``top global 500’’ corporate list by Fortune magazine.
Helped by acquisitions, Doosan Heavy has also become the world’s No. 4 power plant equipment maker just behind General Electric (GE) of the United States, Siemens of Germany and Swiss-based engineering group ABB.
Helped by a series of quarterly earnings, brokerages say the rising momentum of stock prices of Doosan and its key affiliates will continue and claim liquidity-related issues are easing.
Despite such inspiring market responses, Doosan Chairman Park seems to want more.
In a message to employees for the 114th founding anniversary in August 1, Park said the conglomerate still has a long way to go to transform itself into a truly international player.
According to the message distributed by the group’s public relations (PR) office, Park presented the following three phrases _ growth with selective and concentration strategies, strengthening internal capability and solidifying financial soundness _ as the top criteria for corporate sustainability.
``With greater business stability, Doosan plans to keep up with the current aggressive business pitches by fostering new earnings sectors,’’ said the spokesman, Shin.
Doosan is aiming to become a world ``top 200’’ company in terms of total corporate value by 2020.
The group’s principal and critical businesses lie in infrastructure support, which encompasses power plants, desalination, construction equipment and related services, and marine diesel engines.
New markets, new technologies
Besides the steady focus on its conventionally-strong fields, the group has been pushing ``selective’’ strategies according to markets as it believes such customized ones will help it create more synergy between units.
In February this year, Doosan Heavy consolidated the four business units of Doosan Babcock, Skoda Power, Doosan Power Systems Americas and Doosan Power Systems Europe to launch Doosan Power Systems (DPS), which is now headquartered in the United Kingdom.
Each of the business units sitting under the DPS umbrella have a specific focus and enable the company to consistently provide tailored expertise in specialized areas.
``The consolidation is part of our `selective and concentration’ strategy. DPS is being tasked to nurture boiler-turbine-generator or BTG packaging markets,’’ said a Doosan Heavy spokesman Lee Jay-hyung.
Although the decision has been viewed as quite a ``challenging’’ one, the results have so far proved satisfactory.
Local engineering companies have continued winning orders in infrastructure and construction deals in Europe, the United States and the Middle East.
Recently, Doosan Heavy clinched a $3.4 billion deal to build a power plant in Saudi Arabia, beating rivals Hyundai Heavy Industries of Korea and Alstom of France.
The group is also eyeing a bigger share of eco-friendly businesses amid green initiatives by governments.
Following a three-year investment, Doosan Heavy installed a demo plant to produce wind power after the development of Asia’s first terrain-to-sea water wind power system ― WinDS 300.
The plant will start operations this year.
Investment in highly-lucrative clean energy-related businesses is also increasing.
Its power plant unit Doosan Heavy is planning to invest an additional 700 billion won or $605 million in clean energy-related sectors by 2013 to generate some 1 trillion in sales in clean energies.
Doosan has already allocated some 300 billion won in the area since 2004, according to Lee.
The group’s construction machinery affiliate Doosan Infracore has been commercializing hybrid excavators in China earlier than expected to lead its rivals amid tougher regulations to cut greenhouse gas emissions.
``The market for construction machinery in China is showing a clear sign of a turnaround. By selling such products with eco-friendly technologies and more affordable prices than its rivals, Doosan Heavy is planning to keep its current lead in the sector from China to other emerging markets,’’ according to Doosan Heavy spokesman.
Its next excavators, which boast improved usability, efficiency, safety and ecology, were named as the ``Best of the Best,’’ at the internationally acclaimed ``2009 Reddot Design Awards.’’
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