GS Group Does Better Alone

Its assets, sales and profit rise to rank 6th largest since parting ways with LG Group

GS Group celebrated the third anniversary since its separation from LG Group and becoming an independent business conglomerate.
The group has a lot of achievements to celebrate for such a short period: Its annual sales shot up by 49 percent to 34.5 trillion won in 2007 from 24.1 trillion won in 2004 when the group split off from LG. The group also saw its assets grow to 31 trillion won to rank sixth in the country from seventh largest with 18.7 trillion won in 2004.
The group has been running retailing and energy as its main business lines with a great deal of focus on finding new growth engines. Its zeal for M&As has been such that it announced officially that it is a candidate to take over Daewoo Shipbuilding when it is put on the block.
GS Holdings, the mother company of the group, is eager to take over the shipyard, knowing that the synergy created with its affiliates would be very large, officials of the company said.
The group has been looking for new growth engines intensively, but its core business area will remain energy. GS Caltex, an oil refinery affiliate of the group, continues to be the main business muscle for the group. Its sales last year amounted to 21.4 trillion won, accounting for some 60 percent of the group's total annual sales. The oil refinery posted 1.87 trillion won in net profit, up more than 50 percent from the preceding year, breaking the 1 trillion won level for the first time in its history.
The joint-venture oil refinery draws almost half of its sales from overseas and its profit is likely to increase when its third heavy oil cracking facility is completed within the year.
GS Construction also had a super year last year with its project orders rising over 10 trillion won and operating profit up 10 percent from the preceding year at 442 billion won. GS E&C announced its "Vision 2015"earlier this year under which the company will go for project orders worth 24 trillion won and annual sales of 18 trillion won by 2015 so that it will rank among the 10 largest builders in the world based on the standard of ENR, a popular U.S. publication for the world construction industry.
President Kim Kap-yol announced "Vision 2010"when he took over the company's management in 2002, but the plan appeared to be too easy to accomplish as the company's operations improved annually. So the president extended the vision to 2015 and made it bigger.
Kim reorganized the company by launching a task force to support experts working to land overseas project orders. He also steered the company to expand its operations into areas other than those the company has been engaged in, specifically, in such areas as waste treatment facilities and environmental protection businesses as well as energy plant construction, such as power plants and gas storage facilities. GS Construction will also go all out to win projects to build dams and harbors, an urban town and other SOC projects.
On the occasion of the third anniversary, group affiliates including GS Caltex, GS Retail, and GS Homeshopping will hand out GS points as a service to their customers so that they can use points toward paying for products and services at any GS affiliates. To mark the GS point system launch, GS affiliates will observe 'customer appreciation'events from March 31 to May 15 and lucky customers will get shopping tickets and prize coupons for commodities such as free oil service for 30 years. nw

Chairman Hur Chang-soo of GS Group