CJ CheilJedang CEO calls for total overhaul after weak earnings

CJ CheilJedang CEO Yoon Seok-hwan called for a company-wide shakeup, warning that without overhauling business practices that have dragged on performance in recent years, the company’s long-term survival could be at risk.

“After four years of stalled growth, we closed last year with the disappointing result of a net loss,” Yoon wrote in a companywide message to staff Tuesday. “This should serve not as a passing shock but as a warning about the company’s survival in the years ahead.”

The company last year posted a net loss of 417 billion won ($285 million) after non-operating losses tied largely to asset valuation adjustments, while consolidated revenue rose 0.4 percent to 27.34 trillion won and operating profit fell 15 percent to 1.23 trillion won.

Yoon’s candid remarks, delivered just four months after taking office, spoke to challenges beyond a weak earnings year, highlighting the urgent need to remake the company to remain competitive in fast changing global markets.

“Small changes will not be enough to overcome the headwinds we face,” Yoon said, adding that the overhaul would include the company’s business model, operations and culture.

Businesses lacking clear prospects would see resources redirected to more competitive segments, while the company will continue investing in cash-generating areas and overseas expansion of Korean food products.

Sweeping financial discipline must accompany the overhaul, Yoon emphasized, including a zero-based review of rolled-over budgets, marketing spending and low-return research and development, while freeing up capital for growth businesses through sales of noncore assets.

He also linked the reforms to a cultural reset in which performance and accountability take precedence over internal comfort.

“I would rather be remembered as the CEO who saved the company than as a ‘good CEO,’” he said. “We will root out complacency and establish a performance-driven culture centered on survival, fundamentals, results and accountability.”