[THE INVESTOR] Doosan Group chairman Park Jeong-won has proved that his worth as a corporate leader goes beyond his pedigree as a member of the founding family.
Under Park’s guidance, Doosan -- once struggling from deteriorating market conditions and inefficiency issues -- has managed to make a complete turnaround this year, celebrating the end of the second quarter with solid earnings.
The net profit of Doosan’s three core businesses -- Doosan Corp., Doosan Heavy Industries & Construction and Doosan Infracore -- reached a combined 935.7 billion won (US$ 821.07 million). The figure compares with over 4 trillion won of losses the three had incurred in 2015.
Further, all the affiliates of Doosan Group were in the black in the second quarter.
Doosan Group chairman Park Jeong-won (right). / Doosan Group
Cutting costs and improving finances
The reversal in Doosan’s fortunes did not come easy.
Over the past few years, the nation’s 12th-largest conglomerate underwent vigorous restructuring. In 2014, Doosan secured 3.5 trillion won of liquidity by selling its noncore assets. This year, it has attained an additional 1.43 trillion won by selling off divisions in Doosan Infracore and Doosan Engineering & Construction.
Another 3-5 trillion won is expected to come from the listing of Doosan Bobcat that is scheduled for the end of this year, the group said.
Doosan Bobcat -- specializing in construction machinery manufacturing -- recorded sales of 1.11 trillion won, with an operating profit of 149.1 billion won.
With these restructuring measures, Doosan is hoping to reduce its 11 trillion won debt to 8 trillion won by the end of 2016.
Man behind the success: Park Jeong-won
The Doosan chairman is a member of the Doosan founding family. He is the nephew of Park Yong-sung, former chairman of Doosan. His father is Park Yong-gon, honorary Doosan Group chairman and elder brother to Yong-sung.
Park’s chief concern ever since he took Doosan’s helm in March was to improve the company’s financial structure. In his inaugural speech, Park had said his top challenges as chairman would be to drastically improve finances, put ongoing new projects on track and develop new growth engines for the future.
Now that most of the affiliates are showing fast progress, with the group’s finances intact, it may be time for Park to embark on the second phase of his work, according to those close to Doosan.
“It might be a little premature to discuss the future yet, but there are signs from the top management that it is now looking to focus more on what should come next, such as the duty-free and battery businesses,” said one executive on the condition of anonymity.
By Kim Ji-hyun (jemmie@heraldcorp.com)
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