Clockwise from left: Jungheung founder Jung Chang-sun, Jungheung Group headquarters in Gwangju, Daewoo E&C headquarters in Seoul (The Korea Herald)
Behind the surprise bid of Jungheung for the control of a much-larger rival, Daewoo Engineering & Construction, is a self-made entrepreneur little known outside the construction field: Jung Chang-sun, the chairman and founder of Jungheung Group.
Jungheung, founded in the southern city of Gwangju, grabbed headlines on Tuesday after it was selected as the preferred bidder of Daewoo E&C, the nation’s sixth-largest builder with a proud but checkered history. Local media put Jungheung’s bidding price at 2.1 trillion won ($1.86 billion).
Daewoo was once a key affiliate of the now-defunct Daewoo Group, which was the country’s largest conglomerate in the 1990s.
The buy, if realized, would catapult Jungheung into the league of the country’s top builders.
Born in Gwangju in 1943, Jung started off his career in the construction industry as a carpenter at age 19.
Jung first set up a business named Geunnam Housing Construction in 1983 together with colleagues he met at several construction sites.
He then established Jungheung Construction in 1989, Jungheung General Construction in 1993 and Seheung Construction in 1994, expanding his presence in the Jeolla provinces.
In the beginning, Jungheung boosted its construction business in provincial areas, largely relying on public housing projects by Korea Land and Housing Corp. in new town projects. In order to net as many orders as possible from the state housing firm, given out in a lottery-like process, Jungheung had to have many affiliates.
But in recent years, the Gwangju-based construction group rapidly raised its profile nationwide as a builder of the premium apartment brand Jungheung S Class that arrived in Seoul and the neighboring Gyeonggi Province.
With a total of 34 affiliates including Jungheung Building Construction, Jungheung Civil Engineering & Construction, Jungheung Housing, the group has now become the 47th biggest conglomerate with 9.21 trillion won in assets.
The 78-year-old chairman is known as a businessman who went from rags to riches.
Despite his successes, he still enjoys eating at small local diners near the company’s head office in Gwangju to eat home-cooked-style lunches worth around 7,000 won, as he did in his old days.
Up until now, Jung has strictly kept three principles: Do not buy assets not related to business, do not stand surety for anyone else, and do not receive orders that are expected to lose money.
The Jungheung founder is said to set three-year financial plans in advance and review them every three months.
Seeking the next leap, Jung has been on the lookout for acquisitions for years and has thoroughly examined potential targets, company insiders said.
Daewoo, which is estimated to be worth 10 trillion won and has strength in both domestic and foreign construction markets, was seen as a perfect buy to realize his ambition, the sources said.
By Song Su-hyun (firstname.lastname@example.org