Giving Management Reform
a New Twist
- Western Power launches "Y-Project 2007" reform program

The Korea Western Power Co.(President Kim Jong-shin) has committed itself to making a new jump through management reform program entitled, "Y-Project 2007."
Western Power on April 8 held a meeting dedicated to achieving the management reform strategy designed to realize a company preferred and respected by young people. An affidavit to stamp out corruption and remain clean was signed at the meeting, also.
President Kim at the meeting reconfirmed his intention to achieve management reform by signing affidavits with each of the company's key officers.
At a special session held before the meeting, the reform planning officer of the Commerce, Industry and Energy Ministry explained the government's reform plan and measures for managing reform of its affiliates in a bid to expand the base for understanding public-sector reform this year.
Western Power decided to review progress on its reform programs on a regular basis and analyze the results so that resources may be redistributed from unsatisfactory areas to launch a responsible management.
The company also said it has adopted the 6 sigma program to solve various management programs, especially, general and special projects so that they would be carried out without any hitches.
President Kim stressed in-house communication is very important to the extent that directors and managers should be aware of the need by redoubling their efforts to ensure that the developments at the jobsites are reported to management at all times to make sure that every thing goes smooth at the company.
The president also ordered company officials to make sure that those who contribute the most to the success of the reform program are reimbursed properly through systems by establishing proper reimbursement and evaluation systems under the performance management system focused on the Y-project 2007 reform program.
Western Power was established in 2001 with power plant complexes in Taean, Pyeongtaek , Gunsan, Seoincheon, Samnyangjin, and Cheongsong and a total asset of about $2.5 billion. Currently it has 1,587 employees. The power company's total assets included fixed assets taking up 86.1 percent of the total, while liabilities amounted to $920 million with debt to capital ratio amounting to 31.6 percent.
Shareholder's equity totaled $1.6 billion, which is wholly owned by KEPCO. Its net income for the six months ending in June30, 2003, amounted to 110.5 million with net margin of 12.4 percent.
WP is the most profitable Korean generation company and it has been able to cut its leverage in an effort to restructure unfavorable debt with strong cash flow. The company has achieved improving profitability with its EBITDA margin rising to 33.5 percent in the first half of 2003 from 29.1 percent in 2001. Its EBIT margin rose to209.3 percent in the first half of 2003 from 19.8 percent in the previous year and 15.7 percent in 2001. The net margin jumped to 12.5 percent in the first half of 2003 from 11.5 percent in 2002 and 8.9 percent in 2001.
WP has healthy debt service and interest coverage ratios with EBITDA interest coverage ratio standing at 10.7 percent in the first half of 2003, compared to 7.4 percent in 2002 and 5 percent in 2001. Its FFO interest coverage ratio recorded 8.5 percent in the first half of 2003, 5.8 percent in 2002 and 3.9 percent in 2001.
The company's capital expenditure is projected to total 445.2 billion won this year, 718.2 billion won next year, 451.5 billion won in 2007 and 229.8 billion won in 2008.
Bond issued in U.S. currency in December, 2002 diversified the company's debt profile. Its target financing mix is 50 percent from internal retained earning and 50 percent from outside financing. Western Power targets to maintain 60 percent from domestic/40 percent from international sources and at the same time, 30 percent with floating and 70 percent fixed rates. nw