Samsung Electronics Vice Chairman Lee Jae-yong is touring the production line of Samsung Display Asan. (Photo by Samsung Electronics)
Major korean group companies are implementing strategic investments while expanding liquidity to overcome the uncertain management situation in the new Corona virus infection (Corona 19). Corona 19 is interpreted as a step to continue sustainable growth after that.
Samsung, Hyundai, SK and LG continue to invest in securing future food, with cost savings for each company, according to the 28-day financial report. It is a company that prioritizes investment according to the management situation of each company, or is committed to securing the next generation of food according to the characteristics of its affiliates.
Samsung Electronics plans to pursue mid-to-long-term investment plans, such as Samsung Electronics’ Semiconductor Vision 2030, which celebrated its first anniversary. Lee Jae-yong, vice chairman of Samsung Electronics, visited the Mars site, Samsung Display Asan plant, and Samsung Institute of Technology this year, and conveyed the message that the company should continue its technology gap strategy to secure future food such as semiconductors, displays, Artificial Intelligence (AI) and quantum computer technologies.
In April last year, Samsung Electronics announced that it would invest KRW 133 trillion in research and development and expansion of production facilities in the system semiconductor sector by 2030 in order to become the world’s no.1 system semiconductor company. Last month, the company launched the hiring of the largest semiconductor career employee ever. It appears that the company is determined to continue to invest and recruit talent in the midst of the Corona 19 crisis to create a technological gap.
In addition, the 13.1 trillion won quantum dot display (QD) investment announced in October last year is also being pursued as planned. First, the company is focusing on laying the groundwork for building mass production lines and improving product completeness ahead of next year’s start of production of organic light emitting diode (OLED) based QD displays. Samsung Display announced last month that it plans to stop production of liquid crystal display (LCD) this year and focus on investing in QD displays next year.
Samsung Electronics is also committed to reducing costs for each business unit. The rate of budget adjustment is said to vary depending on the department. It is said that when the business boom is normally business, it is said that it is moving resiliently by increasing the budget so that it can make several attempts, and taking cost-saving measures, such as adjusting the marketing costs at all times to suit the departmental situation, when an emergency situation such as Corona 19 is encountered.
A Samsung Electronics official said, “We plan to continue our mid-to-long-term investment plan for future food, and we are making unnecessary cost reductions and short-term management strategies.”
Jeong Sun, Vice Chairman of Hyundai Motor, explains the future mobility direction of the company (Photo: Hyundai Motor)
Hyundai Motor Group intends to make every effort to ensure that investment plans related to future foods, such as next-generation mobility, will be disrupted in the face of the sales crisis caused by Corona 19. In its latest first quarter earnings announcement, the company said it will review preemptive investment priorities for general investments, but that investmentin r&D-related technologies will proceed as planned.
In December last year, Hyundai Motor announced the “2025 Strategy”, which invests KRW 61.1 trillion over the next six years to transform itself into a smart mobility solutions company. In January of this year, Kia announced the Plan S to transform its electric vehicle (EV) business system and provide customized mobility solutions. As part of Plan S, the company will invest KRW 29 trillion by 2025. We are also looking for ventures and start-ups at home and abroad with innovative technologies.
Hyundai Motor Group also announced the return of executive salaries for the first time among the four major groups from this month. More than 1,200 executives from 51 Hyundai Motor Group affiliates return 20% of their salaries and the end date is undecided. In the aftermath of Corona19, car sales plummeted across the world, leading to a cost-out. It is also known that billions of dollars of corporate bonds are being issued to secure cash.
A company official explained, “Corona 19 is a difficult and highly uncertain situation for future forecasts, so we need to secure funding, and we plan to continue securing future technologies with priority.”
President Choi Tae-won is speaking on the theme of expanding partnerships through social values. (Photo=SK)
SK Group is also preparing for a post-corona and is working to secure the liquidity of its funds.
On August 8, SK Chairman Choi Tae-won stressed, “Let’s try to write a history that not only overcomes the Corona 19 crisis, but also makes a big leap forward once again.” On The 23rd, he reportedly held a video conference with representatives from eight regions of China, Japan, Southeast Asia, the United States, and Europe to examine management issues, innovate the way they work on the occasion of Corona 19, find new businesses, and review investment strategies.
SK continues to invest in each of its affiliates and is strengthening its cash flow. SK E&S, a privately held subsidiary of SK, recently disposed of a 10.3% stake in China Gas Holdings worth KRW 1.8 trillion. SK Networks transferred the gas station business to secure 1.3 trillion won in funding. The sale of some of the sites was also reportedly reviewed.
An SK Group official said, “We are making investments in the company’s five new growth engines (IT services, ICT convergence, LNG, biopharmaceuticals, semiconductor materials and modules) at the discretion of affiliates.”
LG Chairman Gu guangmo visits LG Electronics Design Management Center to examine the customer convenience design of the apparel manager installed inside the future connected car. (Photo=LG)
LG Group is preparing for growth after the Corona 19 crisis by upgrading its business portfolio and identifying growth engines.
Lg Chairman Gu Kwang-mo said at last month’s general meeting of shareholders, “Although an uncertain management environment continues, we will respond wisely to prepare for post-crisis growth, and we will continue the challenge of putting customer value first and foremost while focusing on risk management.”
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Lg is implementing measures such as global market supply and demand situation, production and supply chain management (SCM) and inventory management for each of its affiliates. Each company plans to build a battery technology gap, build a connected business ecosystem, develop robotic solutions, innovate materials and components, expand profitability of large organic light emitting diodes (OLED), and develop non-face-to-face (untapped) solutions. Changes are also being made, such as eliminating unnecessary work practices to increase overall productivity and efficiency.
“We are exploring developments after Corona 19 by affiliates, including ongoing R&D and supply chain management,” lg officials said.