DALIAN, China ― On Friday, STX Group announced the “Vision 2020” at its shipyard in Dalian, China at an event celebrating the group’s 10th anniversary.
The group hopes to become one of South Korea’s seven largest conglomerates with combined sales of 120 trillion won ($112 billion) by 2020.
STX Group Kang Duk-soo, however, says that he has his eyes set on the global market.
STX Group chairman Kang Duk-soo speaks at the press conference in China on Friday. (STX)
“Sales of 120 trillion won, and Korea’s top seven conglomerate. These targets were set, but I think such figures are meaningless.” Kang said.
“What is important is the global ranking for each sector. … I think it is important to have strategies for each industry.”
“(For shipbuilding) The target is to raise more than 10 trillion won in sales each from Korean, European and Chinese operations to match Hyundai Heavy Industries’ current scale,” Kang said. He also said that the group aims to balance its earnings among its businesses from the current structure that relies heavily on ships and related equipment, and shipping.
“(The group) Will also expand into eco-friendly engines and aim to bring in at least 10 trillion won in revenue and 600 billion won operating profits from engines.”
Regarding STX Group’s future merger and acquisition plans, which has formed the backbone of the group’s growth strategy in the past, Kang did not rule out such possibilities but said that business strategies need to carefully selected with respects to the specifics of each market and industry.
“Some markets require merger and acquisition actions to enter, while others need us to start from scratch. And that is the same for industries. M&As need to be executed strategically,” Kang said.
“As such, it is not possible to say whether we will grow through M&As or through green field investments. Such strategies need to be executed simultaneously.”
As for the possible initial public offering of STX’ Chinese operations, Kang said that the company was waiting for the right time.
“An IPO is needed as part of an expansion strategy. The value of a company changes according the product portfolio. When that value is high, listing in Hong Kong or Singapore is possible, and we are making preparations,” Kang said. He added that the company would list on the market when its value is recognized.
“Preparations should be made for an IPO, but I think the most important thing is strengthening our core capabilities in order to raise (the company’s) value, and once capabilities and value are increased, listing on the market won’t be a problem.”
By Choi He-suk (email@example.com