LG Looks Beyond 100 Yrs

Group declares its top three management tenets to become among centennial companies

LG Business Group has declared its top three management keys in order to join the club of 100-year-old companies ¡Æ¢â customer value management, proprietary technology management, and green management.
The business group celebrated the 65th anniversary of its establishment on March 27. The late group founder and chairman Koo In-hoe, who started with a Busan-based factory of hit cream product, established Lak Hui (Lucky) Chemical Co, the predecessor of LG Chem, in 1947.
Lak Hui Chemical, now LG Business Group, which posted 300 million won in sales at the time of its establishment, has come from strength to strength to become a conglomerate with a jump in sales of 473,333-fold to 142 trillion won last year and capital soar to 7.8 trillion won from 3 million won. The business group aims to chalk up 158 trillion won in sales this year, surpassing the 150 trillion won threshold for the first time in its history.
The Group has become a conglomerate blazing a trail in such manufacturing fields as chemicals and electronics. The group has enjoyed popularity among the Korean general public as the supplier of daily necessities such as plastics, toothpaste, washing machines, and refrigerators.
The business group began to cut a conspicuous figure as it made inroads into the Korean electronics industry following its entry into the chemicals industry. It was in 1967, 20 years after its founding, that the group made a feat of posting 6 billion won in sales.
Thanks to its globalization efforts, the business group logged 52 billion won in sales in 1970 and made strides with 2.7 trillion won in sales in 1980 due to the diversifying of its business portfolios to trade, financing, and services. The group made exponential growth by posting 16 trillion won in sales in 1990.
Entering the 2000s, GS and LS groups were split from LG Group. LG made another leap forward by posting 80 trillion won in sales in 2005, one year after the separation, thanks to the Group¡¯s specialization in three sectors ¡Æ¢âelectronics, chemicals, and telecom/services. LG Group recorded 142 trillion won in sales in 2011.
In 2003, as it inaugurated a holding company system, LG put forward its top three management tenets for it to become among the 100-year-old companies.
The management tenets are designed to retain customer value management the business group has inherited since its establishment and focus on exploring key proprietary technologies that can control future markets.
LG plans to make massive investments into the ¡°green¡± field with high growth potential in order to nurture the sector as new mainstay businesses.
In particular, LG Chairman Koo Bon-moo has so far been committed to securing proprietary technologies. From the long-term perspective, securing proprietary technologies would give the company a jumpstart in new markets and realize a technology company that can lead customer value innovations.
In this regard, the business group has set aside 4.9 trillion won for R&D activities for this year, representing a jump of more than 2 trillion won from the 2.8 trillion won spent in 2008 and a surge of 600 billion won from last year.
LG plans to develop four green business arenas ¡Æ¢â energy, electric car parts, green living, and health care ¡Æ¢â as part of its efforts to foster the green sector as core future growth engines. The group has established the vision, dubbed ¡°Green 2020¡± calling for raising the portion of sales of the four green businesses to 15 percent of the group¡¯s total by 2020.
To this end, LG plans to pour 8 trillion won into investments in green business projects by 2015 to create 10,000 new jobs and set up collaboration with some 660 SMEs.
The business group aims at posting 4 trillion won in sales in the green sector during this year. It registered 1.5 trillion won and 3 trillion won in sales in 2010 and 2011, respectively. LG expects the green sector to deliver 10 trillion won by 2015, group officials said.

LG Business Group Chairman Koo Bon-moo speaks at a ceremony to celebrate the 65th anniversary of the group's establishment on March 27.

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