GS Group Poised to Make
Aggressive Investments

Seeking more M&As to strengthen the group

GS Group is set to be more aggressive this year. The group plans to set aside 2.3 trillion won for investments during 2007 and aims to post 33 trillion won in sales up from 30 trillion won in 2006.
GS Group's announcement of a dramatic expansion of investments may be construed to the group's bid for attaining external growth through investments together with aggressive M&A attempts.
The group, which has declared the catchphrase "GS, the Value No. 1 Admired by Everyone,"unveiled the 2007 business plan with the goal of revving up sales to 33 trillion won, a some 10 percent rise over last year.
The plan also calls for increasing investments 15 percent to 2.3 trillion won ― 1.6 trillion won in the energy field, 400 billion won in the distribution sector, and this year's investment target represents a whopping 156 percent surge from 900 billion in investments in 2005, industry analysts said.
GS Group Chairman Hur Chang-soo indicated his group's aggressive management strategy during his message of a New Year meeting of group officials, saying, "Starting 2007, we will gear up into an aggressive and creative management mode."According to a detailed investment plan, GS Caltex will invest for expanding Heavy Oil Upgrade (HOU) and chloroform, trichloroethylene, cyclohexane facilities,; GS EPS will pour 159 billion won for the construction of two new power plants,; GS Retail will focus on the expansion of shopping floors while GS Shopping will turn to Internet-related businesses,; and GS E&C will invest in securing land for the purpose of businesses and implementing the private sector-initiated social overhead capital projects.
Investments in the distribution sector will be channeled into expanding such new shops as convenience stores and super discount stores, while GS E&C will concentrate on diversifying plant projects and expanding its participation in SOC projects in foreign developing countries, officials of GBS Holdings Corp., the group's holding company, said.
In particular, GS Holdings and GS Caltex plan to put more energy into implementing more overseas oil exploration projects.
GS Group Huh said during a meeting with reporters in Jeju held on December 8 that GS Group is willing to go for an expansion of the business turf, saying that M&As will be expanded to enter consumer and service arenas on top of the process industry.
Regarding the direction of M&As, Chairman Hur suggested its bid to enter such new industries as the consumption goods sector, saying that the problem is that the group is in a lopsided capital-intensive situation in which GS Caltex and other companies'share in the process industry accounts for a tremendous 80 percent and the consumption goods sector, the remaining 20 percent.
A group executive said the sale of such large companies as Hyundai E&C and Korea Express are to be put on hold for a considerable time. He said his company will concentrate on M&As of foreign concerns rather than those of foreign companies or consider securing new growth engines. nw
           
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GS Group Chairman Hur Chang-soo