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A long ride in a fast machine

Summary: The faces inside KOREA S CONGLOMERATES 78Many groups that grow through mergers experience debt problems but Choi has held fast to a no debt rule using cash and land sales to finance purchases None of the six employees who started at Samyoung Machinery Industries a small Korean machinery company in August 1979 realized that they were witnessing the birth of a conglomerate that would eventually have assets of more than 2 2 trillion won $1 8 billion Choi Pyung kyu never studied management and majored in mechanical engineering in college But when he had a chance to import a so called finning machine used to manufacture a fin tube essential to making heat exchangers from the United States through a friend at Hitachi in 1976 he seized it The machine cost him about 90 million won a huge sum back then and it was difficult to operate All the same Choi founded Samyoung now S T Corporation and stepped into the machinery and automotive component businesses in earnest with the finning machine which finally arrived about six months after the company was founded Choi was only 27 years old when he started his business which has grown over last three decades to encompass 21 subsidiaries and affiliates worldwide including five listed companies Its holding company S T Holdings was founded in Changwon South Gyeongsang in February 2008 The group s main business has remained machinery and automotive components but S T has also advanced into renewable energy motorcycles defense finance and leisure Strategic mergers and acquisitions have been key to its success Excluding S Tc the group s main businesses including S T Dynamics S T Daewoo and S T Motors were all established through M A deals Choi has a natural talent for finance and what he considers first in a potential merger is a company s level of technology S T Dynamics created after S T acquired Tongil Heavy Industries in 2003 is one example of how much Choi values technical skill Tongil was well known for its militant labor union which led Choi to hesitate about an acquisition at first However Choi went ahead with the deal when he discovered the firm s high technical capabilities S T Dynamics mainly produces automotive components defense products machine tools and castings Its main customers are world class corporations such as the U S based Allison and Mercedes Benz Truck Choi s next step was to acquire Daewoo Precision Industries in 2006 after it had undergone a seven year debt workout Renamed S T Daewoo the high tech manufacturer s main products are chassis engine components motors for hybrid cars automotive information systems and defense products such as firearms In the following year Choi took over motorcycle manufacturer Hyosung Industries forming S T Motors with 55 3 billion won in capitalization Outside the automotive components and machinery industries S T Group has varied its business to include finance and leisure through the acquisitions of Kyungwoo Mutual Savings Bank renamed S T Savings Bank in 2002 and Hotel Sorak Park in 2003 Through these acquisitions S T Group has grown into a conglomerate with annual sales of more than 1 6 trillion won Usually a group enlarging through aggressive M A deals faces a rocky road due to declining operating profits and expanded loans But the group s operating profit margin actually grew from 4 7 percent of revenues in 2006 to 11 1 percent in 2009 This stability comes from a rule Choi has kept to no debt in mergers To acquire Tongil Heavy Industries which cost a total of 60 2 billion won the group paid 26 6 billion won through the sale of land and the rest in cash The takeover of Daewoo Precision Industries also didn t involve any borrowing from external sources Instead Korea Development Bank and KDB Capital participated in the deal as financial investors Kumho Doosan STX and S T Group have grown through M As but theses firms performances clearly differ from one another after they went through the global financial crisis said Kang Young il a researcher with HMC Investment Securities Among the companies S T Group has shown the most successful M A results S T s chairman has also enhanced on site management and two way communication with his employees He frequently pays visits to the company s plants to ask his employees what problems they are having and to share new ideas Though S T has cemented its position as one of leading groups in the fields of machinery and automotive components Choi has no plans to slow down In fact he expressed interest in an M A deal with Korea Delphi Automotive Systems Corporation a local automotive components manufacturer based in Daegu earlier this month S T Daewoo currently holds 8 84 percent of the company Choi had pursued KDAC once before back in 2008 but gave up at the time due to the high acquisition price He has been cautious about M As since the acquisition of Hyosung Industries in 2007 however he said We will pursue M A deals if a company put on the market has business value at a low price Analysts believe the group still has growth potential as it seeks to advance into overseas markets in the near future Especially S T Daewoo is expected to win orders for defense products from overseas markets such as the Philippines and Saudi Arabia S T Group s reputation in its industries would not exist without its leader Choi has led the group for the last three decades after starting out with nothing He is now paving the way for his own daughters and sons to take charge of the group s management Choi s eldest daughter 31 became a registered director at S T Holdings in 2007 Choi s second oldest daughter 27 and youngest son 15 are not involved in the business but hold large shares of S T Holdings Choi s daughters and son will be trained in business management but Choi has said if they show no talent for it he will scout professional managers to lead the group He may not have to look far since S T already has a large staff of professionals Park Jae seok also known as Peter Park is the CEO of S T Dynamics It was 2004 when he entered S T Dynamics then known as Tongil Heavy Industries before being renamed in 2005 Started out as an executive director Peter made his way up to vice president and then to CEO Kim Tae kwon the CEO of S T Daewoo spent several years teaching management as a college professor at the University of California San Diego in the U S and Yonsei University in Korea from 1990 to 2005 Joining the group as a management advisor at S T Dynamics in 2005 Kim eventually stepped in as head of S T Daewoo a year after With Kim s professional knowledge in management S T Daewoo was able to generate a record high earnings figure in the first quarter of 2008 less than two years after it was acquired in September 2006 Though the company inevitably faced fiscal challenges from the second half of 2008 to the first half of 2009 due to the global financial crisis S T Daewoo managed to get back on track with its 2010 sales estimated at around 640 billion won Hong Young ki vice chairman and CEO of S Tc started working together with Choi in 1999 as a vice president of the Samyoung Corporation He then was engaged in executive positions including CEO of S T Dynamics for several years and was promoted to vice chairman and CEO of S Tc last year Lee Ho joon CEO of S T Savings Bank spent nearly 10 years at KDB Capital from 1999 to 2008 Lee then stepped in at S T Savings Bank as CEO in 2008 By Jung Jae yoon jyj222 joongang co kr Copyrights ⓒ JoongangIlbo Joins com All rights reserved The faces inside KOREA S CONGLOMERATES 78Many groups that grow through mergers experience debt problems but Choi has held fast to a no debt rule using cash and land sales to finance purchases None of the six employees who started at Samyoung Machinery Industries a small Korean machinery company in August 1979 realized that they were witnessing the birth of a conglomerate that would eventually have assets of more than 2 2 trillion won $1 8 billion Choi Pyung kyu never studied management and majored in mechanical engineering in college But when he had a chance to import a so called finning machine used to manufacture a fin tube essential to making heat exchangers from the United States through a friend at Hitachi in 1976 he seized it The machine cost him about 90 million won a huge sum back then and it was difficult to operate All the same Choi founded Samyoung now S T Corporation and stepped into the machinery and automotive component businesses in earnest with the finning machine which finally arrived about six months after the company was founded Choi was only 27 years old when he started his business which has grown over last three decades to encompass 21 subsidiaries and affiliates worldwide including five listed companies Its holding company S T Holdings was founded in Changwon South Gyeongsang in February 2008 The group s main business has remained machinery and automotive components but S T has also advanced into renewable energy motorcycles defense finance and leisure Strategic mergers and acquisitions have been key to its success Excluding S Tc the group s main businesses including S T Dynamics S T Daewoo and S T Motors were all established through M A deals Choi has a natural talent for finance and what he considers first in a potential merger is a company s level of technology S T Dynamics created after S T acquired Tongil Heavy Industries in 2003 is one example of how much Choi values technical skill Tongil was well known for its militant labor union which led Choi to hesitate about an acquisition at first However Choi went ahead with the deal when he discovered the firm s high technical capabilities S T Dynamics mainly produces automotive components defense products machine tools and castings Its main customers are world class corporations such as the U S based Allison and Mercedes Benz Truck Choi s next step was to acquire Daewoo Precision Industries in 2006 after it had undergone a seven year debt workout Renamed S T Daewoo the high tech manufacturer s main products are chassis engine components motors for hybrid cars automotive information systems and defense products such as firearms In the following year Choi took over motorcycle manufacturer Hyosung Industries forming S T Motors with 55 3 billion won in capitalization Outside the automotive components and machinery industries S T Group has varied its business to include finance and leisure through the acquisitions of Kyungwoo Mutual Savings Bank renamed S T Savings Bank in 2002 and Hotel Sorak Park in 2003 Through these acquisitions S T Group has grown into a conglomerate with annual sales of more than 1 6 trillion won Usually a group enlarging through aggressive M A deals faces a rocky road due to declining operating profits and expanded loans But the group s operating profit margin actually grew from 4 7 percent of revenues in 2006 to 11 1 percent in 2009 This stability comes from a rule Choi has kept to no debt in mergers To acquire Tongil Heavy Industries which cost a total of 60 2 billion won the group paid 26 6 billion won through the sale of land and the rest in cash The takeover of Daewoo Precision Industries also didn t involve any borrowing from external sources Instead Korea Development Bank and KDB Capital participated in the deal as financial investors Kumho Doosan STX and S T Group have grown through M As but theses firms performances clearly differ from one another after they went through the global financial crisis said Kang Young il a researcher with HMC Investment Securities Among the companies S T Group has shown the most successful M A results S T s chairman has also enhanced on site management and two way communication with his employees He frequently pays visits to the company s plants to ask his employees what problems they are having and to share new ideas Though S T has cemented its position as one of leading groups in the fields of machinery and automotive components Choi has no plans to slow down In fact he expressed interest in an M A deal with Korea Delphi Automotive Systems Corporation a local automotive components manufacturer based in Daegu earlier this month S T Daewoo currently holds 8 84 percent of the company Choi had pursued KDAC once before back in 2008 but gave up at the time due to the high acquisition price He has been cautious about M As since the acquisition of Hyosung Industries in 2007 however he said We will pursue M A deals if a company put on the market has business value at a low price Analysts believe the group still has growth potential as it seeks to advance into overseas markets in the near future Especially S T Daewoo is expected to win orders for defense products from overseas markets such as the Philippines and Saudi Arabia S T Group s reputation in its industries would not exist without its leader Choi has led the group for the last three decades after starting out with nothing He is now paving the way for his own daughters and sons to take charge of the group s management Choi s eldest daughter 31 became a registered director at S T Holdings in 2007 Choi s second oldest daughter 27 and youngest son 15 are not involved in the business but hold large shares of S T Holdings Choi s daughters and son will be trained in business management but Choi has said if they show no talent for it he will scout professional managers to lead the group He may not have to look far since S T already has a large staff of professionals Park Jae seok also known as Peter Park is the CEO of S T Dynamics It was 2004 when he entered S T Dynamics then known as Tongil Heavy Industries before being renamed in 2005 Started out as an executive director Peter made his way up to vice president and then to CEO Kim Tae kwon the CEO of S T Daewoo spent several years teaching management as a college professor at the University of California San Diego in the U S and Yonsei University in Korea from 1990 to 2005 Joining the group as a management advisor at S T Dynamics in 2005 Kim eventually stepped in as head of S T Daewoo a year after With Kim s professional knowledge in management S T Daewoo was able to generate a record high earnings figure in the first quarter of 2008 less than two years after it was acquired in September 2006 Though the company inevitably faced fiscal challenges from the second half of 2008 to the first half of 2009 due to the global financial crisis S T Daewoo managed to get back on track with its 2010 sales estimated at around 640 billion won Hong Young ki vice chairman and CEO of S Tc started working together with Choi in 1999 as a vice president of the Samyoung Corporation He then was engaged in executive positions including CEO of S T Dynamics for several years and was promoted to vice chairman and CEO of S Tc last year Lee Ho joon CEO of S T Savings Bank spent nearly 10 years at KDB Capital from 1999 to 2008 Lee then stepped in at S T Savings Bank as CEO in 2008 By Jung Jae yoon jyj222 joongang co kr Copyrights ⓒ JoongangIlbo Joins com All rights reserved

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