Presidential Citation
for KOMIPO

The award recognizes the power company's success of reform effort

Korea Midland Power Co.(President Chung Jang-sup) won the Presidential Citation, the top award in the National Productivity Award at the 30th National Productivity Reform Rally held at the Coex Auditorium in southern Seoul Oct. 10.
The productivity rally is held every year since its establishment in 1962 to boost productivity and competitive edge for government-owned companies, modeled after the Malcom Baldridge National Quality Award in the United States and gives awards to the company evaluated to have raised its productivity to the highest level.
KOMIPO won the award in the future category in 2004, and again in the following year in the area of the information, the Award of the Ministry of Commerce, Industry and Energy. This year it won the Presidential Citation, the top award in the overall category, which is significant in the fact that the company's management and employees achievement in the area of reform has been highly praised outside the company, KOMIPO officials said.
KOMIPO, which operates a number of thermal power plants in the country since its separation from the Korea Electric Power Co.(KEPCO), including Boryung Thermal Power, Incheon Thermal Power, Seoul Thermal Power, Seocheon Thermal Power, Jeju Thermal Power, Yangyang Hydro Power plants with a total power generation capacity of 8,500.4 MW, accounting for 13 percent of total power output in the country.
Since its establishment in 2001, the company pushed the programs to strengthen its competitive edge through the consolidation of its internal capability under the flag of management reform with the voluntary participation of its employees. Until 2003, the company promoted the quantitative expansion of reform mind and changed to qualitative expansion in 2004 to jointly spread the reform mind throughout the company. From 2005, the company tried to link the reform activity to management results.
The company's representative reform example is ERP, the buildup of an overall information system.
From March last year to March this year, the company established an integrated system for strategic management, accounting, installation control, and power generation management, among others, Through the improved system, the company has been able to save 5.7 billion won per year in expenses by eliminating complex often duplicated office procedure, cuts in manpower and in the use of papers, which became a base for strengthened competitiveness and the objective for emulation by others.
One of the key objectives that the company has been after to secure futuristic growth engines is the creation of blue ocean through the development of overseas businesses, which is to strengthen its future growth base by fully utilizing its current core capability. Under this policy, KOMIPO took over a stake in the bituminous coal mine in Australia, turning out 2.5 million tons of coal per year through a consortium with the Korea Coal Corp. and the Hanwha Corp., to secure a base for its overseas operation.
In the overseas power generation area, KOMIPO, in partnership with KEPCO won an order for building a combined cycle thermal power plant(4.35 million kW x 2) on built, operate and maintenance basis valued at $85.5 million from the Lebanese government in January, followed by an order for the construction of a coal-fired power plant(6 million kW x 2) on a built, and operation basis in China. The company, in consortium with Marubeni Corp of Japan was selected as priority bidder in an international bidding for the construction of a privately-financed power plant ordered by the Electric Energy Authority in Indonesia The company has been trying to develop its overseas operations by utilizing its core capability generating an income valued at $4.05 million annually securing the base for its future growth.
Another core business is the new and renewable energy business. The company launched the new and renewable energy business task force to take charge of the new business sector in which the company plans to plunk down 130 billion won in the next 10 years until 2014 under its mid-to long-term new and renewable energy development plan. KOMIPO plans to dominate the business which will become a new industry in this century so that it could be able to develop future growth engines. The company will operate an experimental plant for the development of a new fuel battery, along with a small hydro-electricity facility(0.7 MW x 2) attached to the Yangyang Hydro-Electric Dam. It is in the middle of building a small hydro power plant attached to the Boryung Thermal Power Plant and a wind power plant complex in Yanggu and a solar power plant and other Korean-type new and renewable energy development facilities.
KOMIPO has also established an environmental management strategy, "ECO 2010"under its vision to become a 'super first-class company that care for environment and human.'For the first time in the country, KOMIPO built the environment accounting system linked with the integrated information system and got the ISO14001 international specification certificate to operate a systematic and organizational environmental management system to secure a base for strategic environmental management and sustainable development.
KOMIPO has also been ahead in its ethical management by strengthening the responsibility for following the ethical regulations, introduction of transparency contract system and the expanded electronic bidding for continued ethical and transparent management becoming the top company in the power industry in terms of transparent management for 3 years in a row from 2003 to 2005.
KOMIPO has set its corporate vision, "Global Clean Power Company"and on the occasion of winning the Presidential Citation, will push ahead with further changes and reforms to secure public support and supply stable energy as a public company.
Following are excerpts from a written interview with KOMIPO President Chung Jang-sup on the occasion of winning the Presidential Citation:
Question: What was the motive for submitting an application for the National Productivity Award?
Answer: I understood that the evaluation model was designed from the point of the National Productivity Award helping upgrading management control and results. We wanted to get an objective evaluation of the company's effort to upgrade management productivity and reform activity results after checking the current level of our efforts in the process of preparation to apply for the National Productivity Award.
Q: What have been the most important management policies that you cared in running the company thus far?
A: When I took over the top management of KOMIPO, I put emphases on organizational harmony, creation of future, and trust management.
First, organization members should understand others from their positions and encourage them in a harmonious environment, which I think is the most needed factor. In order to create such an environment, the company manages various programs to induce an open dialogue between senior officials and staff, fair personnel regulations and the guarantee of fair opportunities for all officers and staff.
Second, I think we need to push sustainable reform to strengthen technological capacity to create future in the power generation sector, the base for our industry. We have been exploring new profitable businesses in a positive manner such as new and renewable energy development and overseas businesses.
Lastly, Its trust management designed to raise awareness for ethical management and transparency in office business execution, along with environment-friendly management, support to SMEs and expansion of social contribution activity aimed at winning public support for the company. I plan to do all I can to achieve these goals.
Q: What are some of the proudest achievements that KOMIPO has made in terms of management and reform?
A: First of all, the creation of future is part of the management objectives designed to develop blue ocean businesses to secure future growth engine. KOMIPO is the first power company among the five that launched overseas operations in Lebanon and China involving the operation of a thermal power plant and constructing one.
KOMIPO is the first power company that built up an integrated information system by which management information is collected over the entire phases of the company's operation including finance/ accounting, material purchase, and power generation, through upgraded business processes. The system also provides management information on real time, showing that the company has effectively built a systematic performance result management system.
Team heads have been given expanded approval authority to provide more flexibility and effectiveness in running organization and personnel policies, along with improvement in the performance evaluation system centered around the capacity and results.
Q: As a leader in the age of unlimited competition, you have been obviously trying to improve your self. What were the areas and how much effort have you dispensed in the effort?
A: Top managers are often likened to commanders in war. If they fail to win war, death will come to them. If top managers fail in running the companies well, many employees could lose their jobs. In order to cope with ever changing business environment, I read a lot books on management and on ways to improve myself. I have also been attending many seminars and forums to learn new ideas, all to make KOMIPO a global power company.
Q: I would like to wish that KOMIPO would continue to flourish and listen to your managerial design and vision for the company?
A: Our company's future image is a Global Clean Power Company. With continuous management reform effort, we will try to build an advanced management system and become a global company with competitive power by making advances to overseas power market based on core capability. I think environment, ethics and sharing should form the base of corporate management. All of our officers and employees should do their duty as a corporate citizen and make KOMIPO truly a global enterprise. nw

(from left) KOMIPO President Chung Jang-sup, left, receives the Presidential Citation from MOCIE Minister Chung Sye-kyun. KOMIPO President Chung is surrounded by executives and staff after winning the Presidential Citation.