NongHyup Sets up
Two Holding Firms

To take control of financial and non-financial
sectors; holds festival to promote Korean beef

The Bulgoki(Roast Beef) Festival for domestically bred beef kicked off from June 11 hosted by the National Agricultural Cooperatives Federation(NongHyup) designed to both popularize and stabilize the prices of the Korean beef has been a huge success so far, NongHyup said on July 13.
The event has been attracting so many consumers of Korean beef in the Seoul area and its vicinity that NongHyup has decided to expand the event to local areas from July 13.
The festival involved the sales outlets of the farmers organization totaling 28 in the Seoul area on an experimental basis to lower the prices of domestically bred beef(up only 7 percent during the event period) and pork( pork prices down 9.5 percent) and spur expansion of farmers earnings by about 240 billion won annually. The event has been termed a success in expanding the number of consumers of Korean beef.
NongHyup now plans to expand the festival to local areas at its 650 sales outlets around the country. From July 8, the festival got under way at Animal Husbandry Plazas at Hanaro Mart and NongHyup all across the country and from July 15, 24 NongHyup stock farm products sales outlets have been added to the festival.
NongHyup plans to provide 100 billion won in non-interest loans to sales outlets participating in the festival for the success of the event and in order to provide more chances to consumers, NongHyup will ask for government support in such areas as expanding the number of sales outlets and an extension of the festival period.
NongHyup will split its operations into finance and economic businesses from March 2, 2012 as the Food Agricultural, Forestry and Fisheries Committee of the National Assembly approved the revision of the National Agricultural Cooperatives Federation Law.
The two sectors will be under two holding companies such as the economics holding company and the financial holding company and the economics holding company will have farm and livestock products retail businesses as its major affiliates while the financial holding company will have farmers bank, farmers life insurance and non-life insurance businesses as its affiliates under the NH's main ideal to prepare for the new century in safeguarding the welfare of farm and fishery communities in Korea.
The reform aims at reforming the distribution channels of farm and live stock products, ensuring a stable supply of vegetable, invigoration of livestock products distribution, and strengthening healthy farm and foodstuff.
The reform of NongHyup is also targeted at supporting farm households management, building a base for farming and farm towns, improving welfare of farmers and their rights as well as securing competitive power for the farm and livestock businesses.
The move is also aimed at expanding farm and livestock products overseas and to boost farm income by expanding their market.
The financial sector is invigorating finance to farmers and the general public so that they can secure stable earnings sources, strengthen risk management and also strengthen the mutual financial cooperation.
NongHyup plans to dominate the production of farm products through its organizational set up and boost the power to set prices of farm produce at market through tie-ups with sales outlets of other commodities. The move is expected to expand distribution infrastructure and the wholesale network of farm and livestock products as dominated by NH as the work will include building regional logistics networks and new sales stands and substantially expanding the farm and livestock product sales business.
The reform of the financial business sector is aimed a making financial support available to all farm households to stabilize their operations. New farm funding support will be expanded to 6.5 trillion won and 62.2 billion won in credit, which will be extended to those isolated from financial loans and credits on a sustainable basis to invigorate their economies.
The NH Bank will dish out special loans amounting to 1.2 trillion won under the name of hatbit Loans or Sunbeam Loans to invigorate the lives of poor families this year. The financial reform is also aimed at coping with changes in the financial environment for NH member farm and livestock cooperatives around the country by expanding the base for sustainable growth of those members.
NH also plans to expand its credit guarantees for its members to boost the productivity of farms and fishery businesses to 4.6 trillion won. It will also cut fees for credit guarantees from 0.5 percent and 1.1 percent to 0.3 percent and 0.9 percent, respectively.
The financial sector will also try to expand its profits by managing assets and debt portfolios to maximize profits. It will diversify means for securing funds and management with detailed plans for quantity and interest rates. The banking sector will also improve its evaluation system to expand its financial profit by restructuring its branches.
The reform is also aimed at expanding the operational base to strengthen basic power for business promotion. It will expand deposit and loan activities for a stable management base build-up. Expansion is particularly focused on individual deposits, household deposits and increased loans to credit-worthy mid-level business firms.
The credit sector will also secure a base for growth for such business areas as insurance, credit cards, foreign exchanges and benefit certificate to expand fee income. A special effort will be on installment payment for insurance premiums and long-term insurance coverage including retirement pension insurance. It will also expand the brand power of the NH Card for its own growth base.
The sector's operation will be customer and market centered to strengthen its business capacity. nw

A view of NongHyup's main office building in Seoul.

Photo on Courtesy of NongHyup