|Chairman Moong Koo CHUNG|
Should Hyundai-Kia Automotive Group successfully take over Hyundai Engineering & Construction (HE&C), the former vows to jack up the latter’s annual sales almost six fold during the second decade of the new millennium.
Hyundai Automotive Group issued a press release Tuesday, saying that the Seoul-based outfit will crank up HE&C’s yearly sales to 55 trillion won by 2020 from 9.3 trillion won in 2009.
In addition, the country’s largest carmaker said that it would inject fresh investments amounting to 10 trillion won over the next decade into HE&C, the country’s foremost builder, to create more than 300,000 jobs.
``We are jockeying to boost Hyundai Engineering & Construction to become an internationally high value-added, comprehensive constructor that will chalk up 55 trillion won in sales and garner 120 trillion won in orders per annum by 2020,’’ the group said.
``Together with the automobile and steel businesses, construction will be one of the three major pillars to underpin the group’s growth in the future if we acquire the company.’’
Thus far, two candidates have thrown their hats into the ring for the builder ― Hyundai Group and Hyundai-Kia Automotive Group. A 34.88 percent stake in the top constructor is up for sale by creditors.
The creditors, including the Korea Exchange Bank and Korea Finance Corp., plan to pick a preferred bidder by the end of the year in a deal that is estimated to be worth around 4 trillion won.
At first glance, the ambitious scheme sounds overly optimistic because it is typically very difficult to increase the turnover of a company the size of HE&C by six fold in 10 years. Hyundai Automotive, however, says that it can be done by massive investment and better prospects of gaining big deals.
Under the stewardship of CEO Joong Kyum Kim Hyundai Engineering & Construction came up with its own five-year goal of increasing its annual sales to 23 trillion won by 2015. But Hyundai Motor’s guidance is more encompassing and ambitious.
``We have management knowhow and global competitiveness on top of experience in advancing into world markets. With our help, HE&C will expand its presence across the world,’’ a Hyundai Automotive representative said.
``In addition to the Middle East and Southeast Asian countries where HE&C has a strong footing, we will assist the firm to expand in South American and African countries. Out network in 150-plus countries will be of great help.’’
HE&C was founded in the 1940s by the late Hyundai founder Chung Ju-yung and became the core asset of the Hyundai business empire.
However, the company saw its fortunes decline in the aftermath of the Asian currency crisis in the late 1990s and was eventually handed over to creditors in 2001 through a debt-to-equity swap.
Hyundai Automotive Chairman Chung Mong-koo is the second son of the founder while Hyundai Group is currently operated by Hyun Jung-eun, the widow of Mong-koo’s younger brother Mong-hun.
Hyundai Motor and Kia Motors are the flagship subsidiaries of the group. It also has Hyundai Steel under its wing, which has established a blast furnace to create high-quality steel.
By Kim Tae-gyu