In 1985, Daewoo International became the first Korean firm to open a branch office in Myanmar, which was then one of the poorest Southeast Asian countries with little to offer to investors.

But it is here that the company now expects to harvest an average pre-tax profit of 300 billion won ($267 million) for the next 25 years, starting from the later half of this year.

“Back in the old days, the key role of trading companies was to act as trade broker, connecting local firms to the global market,” said Jeong Ki-seop, senior vice president of the company’s corporate planning division.

The company set up its first-ever overseas branch back in 1969 in Sydney, Australia. It also opened an office in Beijing in 1988, which was before Korea and China established diplomatic ties.

“It was this pioneering DNA which has maintained and boosted our company over the past decades,” Jeong said.

With the development of telecommunications, however, such an intermediary role has faded over the years.

“The point is to evolve from the conventional trade organizer model to a comprehensive project developer,” Jeong said.

“For this, trading firms must expand their business portfolio to future-oriented projects, including natural resource exploration.”

Upon such keynote, the company has been boosting its investment into the discovery of untapped natural resources and the construction of infrastructure in underdeveloped countries.

Back in 2000, it acquired exploration rights from the Myanmar government and has ended up discovering natural gas in three different districts where the world’s top oil companies had failed earlier.

The total amount of gas found there is expected to be equivalent to 800 million barrels of crude oil and 900 million tons of liquefied natural gas, according to officials.

This unprecedented success, however, was not just a lucky break.

“The natural resource business has grown big over recent years, but we took a pioneering step decades ago, when few countries or companies took interest in Myanmar,” Jeong explained.

Daewoo International’s ties with the Myanmarese government go back to the 1980s, when it piloted Korean apparel industries to the Southeast Asian state.

“We won the trust of the government and the people by boosting employment and repeating investment, unlike other foreign firms which only stayed on a short-term basis,” Jeong said.

“So when the Myanmarese government took interest in the exploration of natural resources in the late 1980s, it was only natural that it should give us the priority.”

The success in Myanmar was one of the core reasons that steelmaker POSCO decided to acquire Daewoo International in 2010.

“Daewoo International’s technology and experience will help POSCO advance in the overseas natural resource development field,” said POSCO chairman Chung Joon-yang during his visit to the Myanmar oil field back in 2011.

The steel-based conglomerate’s takeover of the trading company is largely regarded a successful business decision.

“POSCO is a global organization and one of the frontrunners in the field, but its key strength is in manufacturing not trading,” Jeong said.

“Our trading experience and extensive overseas network, when combined with POSCO’s high-quality goods, may create a synergy effect, especially in the world market.”

Fueled by ties with POSCO, Daewoo International recently upped its sales target for the upcoming years.

According to its Vision 2020, the company aims to achieve total sales of 56 trillion won by the year 2020, up from the 17 trillion won recorded last year.

“The results could be even better, once Myanmar business starts to flourish,” Jeong said.

“We will not, however, settle for these benefits but continue to seek other investment in order to maintain sustainable growth.”

Business sectors such as carbon emission value or water preservation, too, may be a new option in the future, he added.

“Our unchanging value is that we have always been and will always be a trade-based company,” he said.

“We will use our strength to move on from conventional trade broker to an active project developer, ready to cooperate with any global partners in the world market.”

By Bae Hyun-jung (tellme@heraldcorp.com)