Doosan, Better Opportunities in Good Times

Turns to preemptive restructuring with the goal of joining the ranks of world-class companies

Doosan Business Group Chairman Park Yong-sung said his group will push ahead with three core strategies designed to prepare itself for the future turnaround of the economy.
Park said in his New Year's message, "This year should be a year when Doosan will aggressively make its way into the ranks of full-fledged world-class businesses by securing potential opportunities to brace for the turnaround of the economy and further our competitive edge. And we can achieve our goals if we work hard with hope amid the lingering crisis."
Citing a Chinese saying, "A man who is willing to go for it will always succeed," Chairman Park said it means that Doosan will have to prepare itself in the year 2010 or after when the economy is on the right track by taking preemptive steps to restructure itself ahead of others.
Park's message signals a strategy that the group will jump ahead of other companies when the economy picks up steam by ramping up its competitiveness through preemptive restructuring during the crisis rather than recoiling itself for a defensive footing.
The group has established its three core strategies for 2009 -- securing opportunities and competitiveness to prepare itself for the turnaround of the economy, maximizing cash flow and building world-class management infrastructure. Based on these strategies, the group aims to post 25 trillion won in sales and 1.8 trillion won in operating income in 2009, representing a 9 percent and 27 percent increase over 2008, respectively.
Predicting that the economy will take a turn for the better in 2010 or after, Doosan has a strategy to cut down on costs by securing competitive outsourcing firms for each product to revamp infrastructure in preparation for the economic recovery period, group officials said.
Amid uncertainties in the financial markets, the group plans to secure enough cash to maintain the continuity of businesses and have room to invest during the economic recovery period. It is striving to focus on improving operating funds and building a sound financial structure as well as the establishment of rational investment plans.
In particular, Doosan Business Group plans to place priority on sharing a global network. This is designed to efficiently combine original technologies the group has acquired through aggressive M&As by Doosan Heavy Industries and Construction and Doosan Infracore, the group's subsidiaries since 2005, such as Doosan Hydro Technology's original desalination technologies, Doosan Babcock Energy's original thermal power plant boiler technologies and Moxy Engineering AS's articulated dump truck technologies.
The group has a strategy for synergetic effects through the collaboration of its global network -- 27 overseas production plants, 91 incorporated companies, 74 branches and 4,158 dealerships across the globe.
In early 2009, Doosan Heavy Industries and Construction will inaugurate Doosan Vina, the desalination plant in Vietnam the company has been planning since 2007. The forthcoming desalination plant is expected to see its production capacity increasing to that of Doosan Heavy Industries and Construction headquarters in Changwon, Korea, in order to fend off Chinese companies' low-price offensive on the international market.
Doosan Corp. aims to wrap up the disposal of the liquor division and a shift to a holding company system within this year.
Doosan Construction and Engineering will be placed on an emergency management footing to secure solid financial soundness by strengthening profit-making tactics and creating opportunities for the future.
Doosan Engine plans to step up cost management in order to secure materials suitable to its production capacity. The company expects some tangible results to be yielded by revitalizing the diesel/power division, engine components division and service business division.
Business analysts said the business group's bold moves originate from the lessons it learned from the Asian financial crisis of the late 1990s when it turned to swift restructuring, which led to its successful overcoming of the crisis without outside help. The group had managed to enter the infrastructure support business, including power installation and heavy-duty equipment, by capitalizing on its deep pockets. The group had shifted its business portfolios from a consumer products-oriented structure to an industrial goods-oriented one as it succeeded in acquiring Hanjoong, the predecessor of Doosan Heavy Industries and Construction.
A group official said the group is now poised to take preemptive steps to restructure in order to seize better opportunities and raise the value for shareholders as it did during the Asian financial crisis. The group aims to achieve its goals for 2009 and seize opportunities to make a leap forward toward becoming a world-class conglomerate through preemptive restructuring and a strong push of its core strategies. nw

Doosan Business Group Chairman Park Yong-sung