Six Decades of Brilliance

LG celebrates 60th birthday with determination to continue to uphold biz tradition

LG Group celebrates its 60th anniversary this month, its history traced back to January, 1947, when late founder Koo In-hoe set up the Lucky Chemical Industrial Co. in Busan. But the actual history is longer dating back to November, 1945 when the leader of the Koo clan from Jinju, South Gyeongsang Province, in his 20s launched the Jeosun Trading Co. in 1945, the year the country was freed from Japanese colonial rule and taken over by the U.S. troops assigned to Korea to oversee the dismantlement of Japanese troops in the country.
The daring young businessman got the help from the richest Hur family in town who decided to gamble with young Koo's passion for business and gave him funds to set up the company on condition that he will take on his third son Man-jong as a management trainee in the new company. Man-jong retired as a honorary chairman of GS Construction and died later.
Lucky Chemical debuted its first product in the war-torn country,
a cosmetic facial cream and began to market them at open- air markets and through door-to-door salesmen around the country in towns and villages left out of war. In the initial year of operation, the company posted 300 million won in annual sales. The company kept adding products such as toothpaste and soaps both cosmetic and laundry to keep itself growing. In 1952, the company became the first to produce and market plastic products, opening the age of plastics in the country. The company also produced and marketed tube toothpaste for the first time in the country.
In 1967, some 20 years after the initial start, Koo launched an electric appliance company in 1967 named Goldstar Co., which later changed the name to LG Electronics Co., and which now became a global concern with plants around the world. Koo saw the company's sales expand 20 times the sales posted by the chemical company and just over a decade later the company recorded an annual sales of 2.7 trillion won in 1980. founder Koo died in 1969 and his eldest son Ja-kyung took over the business group,
following the death of his father in 1970.
With the group's sales reaching 30 trillion won in the early 2000s, it was broken up into LG, GS and LS groups, former dominated by founder Koo family siblings, GS by Hur family members and LS by other members of the Koo family including brothers of the late founder.
In 1962, Goldstar cut the tape for the nation's exports by shipping 62 sets of radios valued at $4,000, but in 2006, the group's exports totaled $40 billion, growing 10 million times the initial export amount some two decades ago. Late founder Koo started out his company with 20 employees in 1947, but the conglomerate now has some 140,000 workers on its payroll.
In the electronics sector, the LG Electronics now has locally incorporated subsidiaries in over 100 countries and the global enterprise now draws some 80 percent of its sales from overseas.
The products include 42-in LCD TV, light storage, air conditioners for homes, CDMA cell phones, large TFT-LCD.
A total of 16 of its products were listed as the top products in the world. The LCD business, in particular, since its hook up a foreign partner in 1999, has been leading the world display business sector.
The group beefed up its size by acquiring Hyundai Petrochemical. The group launched its communication business in 1996 by setting up LG Telecom, followed by taking over of LG Dacom and LG Powercom, a move that the group hoped would make it a frontrunner in the business. LG International has been engaged in the exploration of natural resources overseas along with retailing raw material in the hope that they will sustain its future as next-generation growth engines.
LG Chemical rewrote the nation's corporate history in 1957 by openly hiring new employees through public announcements for the first time as a private company in the country. The move was a big surprise to the country because all companies hired employees through personal connections including alums, friends and relatives.
The company also broke the corporate tradition by listing itself on the stock exchange for the first time as a private company in 1970.
LG Group has undoubtedly been a large column that sustained the growth of the Korean economy throughout its 60 years of history. The 60th birthday in a man's life is a big milestone. It's the same with a business firm. It has to keep on growing to sustain itself.
The outlook has not been always bright for the LG Group because it now has to keep on creating its own values alone since its spin-off with GS Group and LS Group.
At the new year's ceremony for the group in Jan. 2 at the Yeouido Twin Building, Chairman Koo Bon-moo, called on officers and staff of the group to do their best to keep the group going for 100 years, now that it has reached 60 year-mark, as if to borrow from his grand father's fierce determination to lay the foundation for the group's operation 6 decades ago and hard work to keep it moving ahead.
The chairman usually limited his speeches short, but on that day, his speech was longer than usual, containing a simple message though, calling for the rebirth of the group and change. He used the word "change"six times in the speech to stress the need for the change for the survival of the group as a viable business conglomerate.
The chairman said all officers and staff of the group should throw away outdated office procedures, bad habits and obstinacies. "Its not enough to follow changes, you have to change that much,"LG Group Chairman Koo Bon-moo appealed for creation of values recognized by customers.
Chairman Koo told those gathered at a New Year's meeting held at the LG Twin Tower in Yeouido that now is a time when LG should take the upper hand through creation of customer values.
Chairman Koo extended his appreciation to customers for loving LG and his executives and staff members for making their utmost, saying that "This year is a remarkable year for celebrating the 60th anniversary since we began to write a history of LG.
"The speed and scope of changes we will face ahead will be basically different from those of the past. From now, only rapidly corresponding to the changes is insufficient, so LG should take the lead in the changes of the future through first-class management aimed at spearheading customer values,"Chairman Koo said.
"We should create values customers recognize a step ahead of others. The starting point of the end is when we make efforts to search for what customers want with a passion and a determination, and the most remarkable moment for LG is when the group will surpass its limit to deliver more excellent values to customers,"he noted.
Second, Chairman Koo called for a thorough preparedness for a sustainable growth. "What do we adopt as our own strategies for ensuring sustainable growth's Are we fully prepared for securing capabilities's These are the questions we have to ask ourselves in this morning of a year marking our 60th anniversary, and one of the most important things managers, including CEOs, have to perform is to prepare plans for the future and translate them into actions,"he said.
Last, Mr. Koo urged his executives and staff members to develop a corporate culture so that they can go to his great length to display their creativity. "The reason we cannot spearhead changes is not because we do not know the direction, but because we work at a slower speed compared to the swifter pace of changes and bigger scope and lack creativity. We should establish a culture in which aggressive challenges and innovations are encouraged and those who learn them and grow during the process are recognized."Chairman Koo said. nw

Koo Bon-moo, chairman of the LG Group.

(Photo from left) The office building of the Lucky Chemical Industrial Co., the mother company of the LG Group, opened in 1947 by late founder of the group Koo In-hoe.; Cosmetic cream produced and marketed by Lucky Chemical in the early 1950s.; The first TV set manufactured by the Goldstar Electronics Co. in the early 1960s and the company later changed the name to LG Electronics Co

LG Twin Building in Yeouido