Turning Crises
into Opportunities

GS Group to plow 2.5 tln won into new, expansion projects this year, up 10 pct from 2007

GS Group, comprising GS Caltex among others, said it will increase investments and sales by 10 percent in the new year. The conglomerate's investments will expand to 2.5 trillion won this year and sales revenue to 36 trillion won, Chairman Hur Chang-soo of the group said at the group's New Year's ceremony Jan. 2.
He said they should stay a step ahead of changes and trends and be prepared with products and services. He also advised that they should be daring in their investments so as not to miss opportunities.
Neither the chairman nor the group have mentioned plans for M&As or the scale of hiring for this year, however.
The breakdown of investment by business area shows that the energy sector will get 1.5 trillion won in new investments and the distribution and construction sectors will get 500 billion won each.
GS Caltex will invest in the construction of a third heavy oil cracking facility, the expansion of the light oil desulfurizing facility and the expansion of the second power generation facility at its GS EPS in Dangjin, South Chungcheong Province.
GS Retail will expand the number of GS 25 convenience stores to 900. GS Homeshopping will also increase its Internet-related shopping network. GS Construction will invest in securing land and civilian-financed infrastructure.
Group officials said the scale of investment for last year was large due to the completion of the second heavy oil cracking facility at the GS Caltex oil refinery, but this year the investment scale is large, although there is no single project of a similar scale. They said the group will focus on overseas natural resources exploration this year.
GS Caltex will continue to look for crude oil in such regions as the Middle East and Central and Southeast Asia to expand Korea's self-sufficiency for crude oil to 10 percent. The oil refinery will also focus on its Chinese operations this year by setting up gas stations in cities throughout Shantung Province, in addition to the two gas stations it currently operates in Chengdu, under its strategy to expand its retail network in China.
GS Holdings will also push its oil exploration projects overseas this year as it has been doing since 2005, when it joined the exploration project of a mining block in Indonesia. It is currently participating in oil exploration in seven mining blocks in such countries as Yemen, Kazakhstan and others in the Middle East and Central Asia. The company plans to engage in power generation and heating projects in the Middle East and Southeast Asia to expand its income from overseas.
At the group's New Year's meeting attended by some 150 officers and staff, the chairman said the group should stick to its principles to overcome any adversities in its way and they should find opportunities in crises with a strategic mindset that everyone working for the group should have this year.
Hur thinks that the group worked on building its foundation over the past three years since its independence from LG Group in 2005 and it should now focus on creating 'Value No. 1 GS'based on that foundation.
He warned that the business environment this year would not be so friendly with global economic growth showing signs of slowing. He said under such conditions, the competition will get tougher and customers will become more demanding.
He also warned that the new year will be a crucial one for the group because it will have a great bearing on the success of its five-year vision, which was declared in 2005, calling on everyone in the group to be ready to face the challenges that lay ahead.
Hur said everyone needs to return to basics when they draw up the 2015 vision and renew their resolve to achieve what they set out to do, no matter what.
The group chairman also told the participants of the meeting that everyone in the group should learn to take advantage of the crises because they can be opportunities if they know how to mentally prepare themselves in such a way. Even if the business environment worsens, he said, they have to be caring and positive to catch the opportunities. He said customers'needs change, too, when economic trends change and they ought to be able to spot the changes and trends before they actually occur and be ready with products and services when the changes arrive. They also ought not to miss investment opportunities by adopting daring and winning attitudes. nw

Chairman Hur Chang-soo of GS Group.