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- SK’s Chey Tae-won’s 30-Year Commitment Pays Off: Bio Business Emerges as the 'Second Semiconductor'
- Chey Tae-won, Chairman of SK Group, is beginning to see the tangible results of his 30-year steadfast investment in the bio industry.
Chairman Chey actively supported the bio business as a future growth driver for the group, even when its profitability was unclear. As a result, SK has now developed its capabilities in everything from new drug development to biopharmaceutical production.
Chey aims to replicate the semiconductor success of SK Hynix in the bio business, with a vision to make bio a future cash cow on par with semiconductors.
According to the bio industry on August 13, SK Pharmteco, a contract development and manufacturing organization (CDMO) wholly owned by SK Group’s holding company SK Inc., recently signed a large-scale supply contract with a global pharmaceutical company.
It is presumed that SK Pharmteco secured a significant contract with Eli Lilly to supply obesity treatments. The five-year contract is estimated to be worth at least KRW 1 trillion (US$ 720 million) and potentially up to KRW 2 trillion (US$ 1.44 billion).
An SK representative commented, “We cannot confirm SK Pharmteco’s contract,” and added, “It is not subject to mandatory disclosure obligations.”
In the Korean stock market, conglomerates with total assets exceeding KRW 2 trillion (US$ 1.44 billion) are required to disclose contracts if the value exceeds 2.5% of the previous year’s revenue. SK’s consolidated revenue for 2023 was KRW 131.2379 trillion (US$ 94.66 billion), meaning the 2.5% threshold is approximately KRW 3.28 trillion (US$ 2.36 billion).
In August 2023, SK Pharmteco announced an investment of KRW 314.7 billion (US$ 227 million) to expand its advanced small-molecule and peptide production facility in Sejong City. Peptides are raw materials formed by linking two or more amino acids and are a key component in Eli Lilly’s obesity treatment, Zepbound.
Lee Ji-soo, an analyst at Daol Investment & Securities, stated, “SK Pharmteco’s small-molecule and peptide plant will be completed in 2026 and begin operations in 2027. The expansion will address the increased production demand from large-scale contracts with major pharmaceutical companies.”
The global obesity treatment market is growing rapidly.
Goldman Sachs, a U.S. investment bank, predicted that the global obesity treatment market would reach $130 billion (KRW 186 trillion) by 2030.
Pharmaceutical giants Eli Lilly and Novo Nordisk are struggling to meet rising demand, which likely led them to choose SK Pharmteco as one of their contract manufacturers.
SK Group’s investment in pharmaceuticals and bio began over 30 years ago.
In 1993, SK entered the pharmaceutical and bio industry by forming a drug development team at SK Energy’s Daejeon Research Center. In 2011, SK spun off its drug development business unit to establish the subsidiary SK Biopharm, significantly strengthening its bio investments. In January 2020, SK Pharmteco officially launched as a wholly owned subsidiary of SK.
SK’s bio business faced long periods without profitability. Nevertheless, Chairman Chey did not cease investments in the sector.
As a result of this consistent investment, in November 2019, SK Biopharm’s epilepsy treatment Cenobamate (marketed in the U.S. as Xcopri), which was independently developed from candidate discovery to clinical trials and regulatory approval, received approval from the U.S. Food and Drug Administration (FDA). To date, over 100,000 patients in the U.S. and Europe have been prescribed Cenobamate.
Chairman Chey has designated bio, battery, and semiconductor (B.B.C.) as the three core growth pillars of SK Group. His eldest daughter, Vice President Chey Yoon-jung, has also been working at SK Biopharm since 2017.
In July 2023, during a business trip to the U.S., Chairman Chey visited SK Life Science, SK Biopharm’s U.S. subsidiary, to directly oversee the bio business.
Chey has set a goal of building a global pharmaceutical and bio company with independent capabilities across new drug development, production, and marketing by 2030.
Under this strategy, SK Biopharm will focus on new drug development, SK Pharmteco will handle production, and SK Life Science will oversee product sales. SK Group also plans to leverage its strengths in artificial intelligence (AI) for new drug development.
Analysts believe that SK Group’s expertise in semiconductors can be applied to the bio business.
The CDMO business shares similarities with the semiconductor business in that it requires cost reduction through mass production and consistent quality maintenance. Success in both fields also depends on quickly responding to customer demands and building trust.
Kim Soo-hyun, an analyst at DS Investment & Securities, stated, “Since April and May of this year, major global pharmaceutical companies have been actively seeking non-Chinese CDMO firms, including SK Pharmteco. The estimated value of SK’s stake in SK Pharmteco is approximately KRW 5 trillion (US$ 3.6 billion).”
#CheyTaeWon #SKGroup #SKPharmteco #biotechnology #obesitytreatment #EliLilly #CDMO #Cenobamate #SKBiopharm #bioinvestment #BBCCoreGrowth #Zepbound #globalpharmamarket #artificialintelligence #futurecashcow
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- DL E&C’s ACRO Returns to Seoul: Park Sang-shin Targets Urban Redevelopment
- Park Sang-shin, CEO of DL E&C, is striving to elevate the value of the company’s high-end brand “ACRO” by supplying it in Seoul for the first time in seven years.
The strategy to boost ACRO’s brand value in Seoul is seen as preparation for next year’s fierce competition to secure urban redevelopment projects in the city’s key regions.
According to DL E&C insiders on August 13, several ACRO-branded projects are lined up for launch in Seoul.
Next year, DL E&C plans to launch sales for “ACRO de Seocho,” which will be built through the redevelopment of Seocho Shindonga Apartments in Seocho-dong 1334, in March.
This will be followed in April by “ACRO RiverSky,” a redevelopment of Zone 8 in Noryangjin, located at 44-1 Daebang-dong, Dongjak-gu.
These developments include around 1,000 units each, showcasing large-scale, high-end residential complexes in affluent Seocho and the large-scale redevelopment area of Noryangjin New Town. ACRO de Seocho will consist of 1,157 units, while ACRO RiverSky will offer 987 units.
The outlook for the success of ACRO de Seocho and ACRO RiverSky appears positive.
This optimism is fueled by the recent success of “ACRO Ritz County,” considered a litmus test for ACRO’s market performance in Seoul. Despite increasing market uncertainties, ACRO Ritz County received significant attention and was deemed a success.
ACRO Ritz County, located at 1018-1 Bangbae-dong, Seocho-gu, is being rebuilt from Bangbae Samik Apartments and will feature eight buildings with 707 units, spanning from five underground floors to 26 above-ground floors. Of these, 140 units were made available for public sale.
In the special supply round conducted in December, ACRO Ritz County recorded a high average competition rate of 251.4-to-1, and 482.8-to-1 in the first round (regional) public subscription. For the popular 84㎡ units, the first-round competition rate reached 825.6-to-1.
The success of ACRO Ritz County holds significant meaning for DL E&C’s housing business.
ACRO Ritz County marks the first ACRO-branded project completed in Seoul since the “ACRO Seoul Forest” launched in 2017.
Initially introduced as a high-end brand in 2013 with “ACRO River Park” in Seocho-gu, the ACRO brand strategy focused on prime locations along the Han River.
This approach, combined with individual project schedules, resulted in a prolonged absence of ACRO-branded launches in Seoul.
Furthermore, ACRO Ritz County overcame challenges in its early stages, when concerns over a possible contract termination arose.
In May 2020, DL E&C (formerly Daelim Industrial) secured the construction contract for the Bangbae Samik redevelopment project.
However, internal conflicts among union members that same year triggered concerns over the termination of DL E&C as the construction partner.
Around the same time, DL E&C lost the construction contract for Bangbae Zone 6 due to disputes over design and construction costs.
Nonetheless, the company retained the Bangbae Samik project, marking its return to Seocho-gu with ACRO River Park and ACRO Riverview.
CEO Park appears to have focused on enhancing ACRO’s brand value and recognition through the successful launch of ACRO Ritz County.
DL E&C established a new ACRO residential exhibition hall, unveiled during the ACRO Ritz County launch, to highlight the brand’s re-entry into Seoul after seven years.
CEO Park has been directly involved in enhancing the ACRO brand value, including leading its rebranding efforts.
During his tenure as head of the Housing Business Division, Park spearheaded the first ACRO brand renewal in November 2019, following two years of research, development, and market analysis.
The successful launch of ACRO Ritz County was largely driven by the price cap system, which is expected to yield market gains of nearly KRW 800 million (US$ 576,000) per unit.
However, the value of the ACRO brand itself is also seen as a significant factor contributing to its success.
Through CEO Park’s strategy to strengthen ACRO’s competitiveness, DL E&C is expected to intensify its efforts to secure housing projects, particularly in the urban redevelopment sector.
Currently, DL E&C is the leading contender for the redevelopment of Zone 5 in Hannam New Town, the last remaining project in Seoul’s Yongsan-gu. DL E&C was the sole bidder in both rounds of bidding for the construction contract this year.
Moving forward, DL E&C is likely to target major urban redevelopment projects in Seoul, including the redevelopment of the Seongsu Strategic Redevelopment Zone, the Yeouido reconstruction project, and the Apgujeong reconstruction project.
Given the prime locations, DL E&C is expected to propose ACRO as the brand for these projects.
CEO Park’s term runs until August 2027, during which he is likely to lead DL E&C’s housing business and urban redevelopment efforts in the increasingly competitive Seoul market.
For CEO Park, the upcoming bids with ACRO offer a chance to redeem past setbacks. In 2020, while serving as head of the Housing Business Division, DL E&C failed to secure construction contracts for the Sinbanpo Zone 15 reconstruction project and the Hannam Zone 3 redevelopment project.
DL E&C proposed ACRO for both high-profile projects on the Han River, but ultimately lost to Samsung C&T and Hyundai Engineering & Construction, respectively.
The Sinbanpo Zone 15 project selected its construction partner in April 2020, and the Hannam Zone 3 redevelopment project followed in June 2020. CEO Park stepped down as head of the Housing Business Division in July of that year.
DL E&C stated, “The new ACRO residential exhibition hall will be introduced again for the redevelopment of Seocho Shindonga Apartments and Noryangjin Zone 8 next year following ACRO Ritz County. We will continue to promote ACRO’s distinctive spatial philosophy and brand identity.”
#DLENC #ACRO #UrbanRedevelopment #LuxuryHousing #Seocho #Noryangjin #ParkSangShin #ACRORitzCounty #SeoulRealEstate #ConstructionProjects
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- Yoon Fuels Impeachment Sentiment, Han Dong-hoon Distances Himself; Opposition Questions "Mental State"
- President Yoon Suk-yeol's abrupt national address amidst the impeachment crisis has once again shaken the political arena.
After President Yoon expressed his stance that the December 3 martial law had no problems, the Democratic Party of Korea and other opposition forces strongly criticized him, questioning the president's "mental state." Not only the opposition but also Han Dong-hoon, the leader of the People Power Party (PPP), appeared to distance himself from Yoon, even suggesting the president’s expulsion.
President Yoon delivered his emergency national address on the 12th at the Presidential Office in Yongsan, Seoul, regarding the December 3 martial law. He stated, "The martial law measure, carried out under the president’s legal authority, is a high-level political decision. Viewing the emergency action taken to save the nation as an act of rebellion that seeks to destroy it seriously jeopardizes our Constitution and legal framework."
President Yoon’s address lasted over 25 minutes, focusing heavily on the claim that the martial law was necessary due to the “tyranny” of the dominant opposition party and asserting that it did not constitute rebellion. His remarks are widely seen as an attempt to justify the legitimacy of the martial law declaration.
The Democratic Party and opposition leaders fiercely criticized President Yoon, questioning his "mental state."
Kim Min-seok, a senior member of the Democratic Party, held an emergency press conference and said, "Yoon Suk-yeol’s mental state has been reconfirmed. Admitting to planning an unconstitutional and failed martial law as an emergency action is an expression of extreme delusion, an admission of illegal martial law, and effectively a declaration of war against the public."
Hwang Un-ha, floor leader of the Cho Kuk Innovation Party, criticized the address, saying, "Yoon Suk-yeol’s thought process is at the level of delusion and paranoia. It is deeply disheartening that the president of South Korea has such a delusional and paranoid mindset."
Yong Hye-in, leader of the Basic Income Party, added, "Rebel leader Yoon Suk-yeol has issued his final command to a small group of far-right supporters and YouTubers, telling them to follow him no matter what happens."
Even Han Dong-hoon, the leader of the People Power Party, expressed disapproval, calling President Yoon’s remarks inappropriate.
At a PPP parliamentary meeting on the 12th, Han Dong-hoon stated, "The president’s address did not reflect on the situation but instead justified it, effectively admitting to rebellion. The public will absolutely not tolerate this, and from the perspective of democracy, the president’s address is unacceptable."
Some pro-Yoon (pro-Yoon Suk-yeol) lawmakers loudly protested, shouting for Han’s resignation. Despite this, Han ordered the convening of an emergency ethics committee to discuss Yoon’s expulsion from the party.
Han’s decision to criticize the president and mention expulsion reflects concerns that Yoon’s national address may further damage public opinion. With recent polls showing 75–80% support for impeachment, the lack of remorse in Yoon’s address has only intensified calls for his resignation.
Political commentator Jang Sung-cheol remarked on MBC Radio, "When the martial law was declared, people wondered if the president had ‘gone mad,’ but after today’s address, I still couldn’t find any logical reasoning to change that perception."
Some analysts believe Yoon’s national address was an acknowledgment that the impeachment motion cannot be stopped.
Before the address, Han Dong-hoon publicly stated that impeachment was necessary, making it increasingly likely that the impeachment motion, scheduled for a parliamentary vote on the 14th, will pass.
Yoon’s claim during the address that December 3 martial law falls under a "governmental act" exempt from judicial review also supports this analysis.
A governmental act refers to a concept recognized by the Supreme Court and Constitutional Court, defined as a highly political act by a state institution that is unsuitable for judicial review.
However, the Supreme Court and Constitutional Court have maintained that even governmental acts can be subject to judicial review if they infringe on fundamental rights or blatantly violate the authority of other constitutional institutions.
The Supreme Court ruled in 1997 during the trial of former President Chun Doo-hwan on rebellion charges that, "If the declaration or extension of martial law was carried out to achieve the purpose of disrupting constitutional order, the courts can determine whether it constitutes a criminal act."
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- Yoon Suk-yeol Defends Martial Law Legitimacy, "Exercised Legal Authority to Protect Nation"
- President Yoon Suk-yeol claimed in a national address that the December 3 martial law does not constitute rebellion and criticized the Democratic Party of Korea.
In an emergency national address on the 12th, President Yoon said, “In a destructive national emergency that paralyzed state affairs, the martial law measure implemented under the president’s legal authority to protect the country and normalize governance is a high-level political decision that can only be controlled by the National Assembly’s demand for its termination.”
He continued, “I immediately accepted the National Assembly’s demand for termination,” adding, “Considering an emergency measure to save the nation as an act of rebellion that seeks to destroy it puts our Constitution and legal system at serious risk.”
President Yoon emphasized the legitimacy of the martial law measure and made it clear that he does not intend to step down as president.
He said, “Over the past two and a half years, I have fought solely for the people, defending and rebuilding liberal democracy by standing against injustice, corruption, and violent acts disguised as democracy. I will fight together with the people until the very end.”
President Yoon claimed that martial law is a constitutional authority granted to the president and explained that its purpose was to inform the public of the tyranny of the dominant opposition party. This statement suggests that he believes the martial law declaration does not involve any illegality.
He stated, “I judged the current catastrophic paralysis of state affairs as a collapse of national administrative and judicial functions and exercised the president’s authority within the framework of the Constitution. The purpose was to inform the public of the dominant opposition party’s anti-national misconduct and to warn against it.”
President Yoon further argued that the force paralyzing state affairs and causing constitutional disorder is the dominant opposition party.
He said, “Over the past two and a half years, the dominant opposition party has refused to acknowledge the president elected by the people and has ceaselessly agitated for resignation and impeachment. They have paralyzed the state through repeated impeachment actions.”
President Yoon added, “The National Assembly, controlled by the dominant opposition party, has become a monster that destroys the constitutional order of liberal democracy instead of serving as its foundation.”
He criticized the dominant opposition party for blocking the revision of the espionage law, which he claimed threatens national security.
President Yoon explained, “For example, in June last year, three Chinese individuals were caught operating drones to film a U.S. aircraft carrier docked in Busan. However, under current laws, there is no way to punish such foreign espionage acts as espionage crimes.”
He said, “To prevent such situations, we tried to revise the espionage provisions of the Criminal Act, but the dominant opposition party firmly opposed it. Isn’t this essentially telling us not to catch spies who threaten national security?”
President Yoon also criticized the opposition party for reducing the budgets for the special activity expenses of the prosecution and police, describing them as forces causing social disruption.
He said, “The dominant opposition party completely cut next year’s special activity and operational expenses for the prosecution and police to zero. These are critical funds used for investigating financial fraud, crimes against the socially vulnerable, drug crimes, and counter-espionage operations.”
President Yoon added, “Blocking investigations into crimes like drug trafficking and organized crime essentially turns South Korea into a haven for spies, a drug den, and a country run by gangs.”
He also criticized the opposition party for reducing the government’s budget for key projects such as the "Great Whale Project," industrial ecosystem creation, and the Innovation Growth Fund.
Regarding the deployment of martial law troops to the National Election Commission during the December 3 martial law, President Yoon explained that there were specific circumstances justifying the decision.
He stated, “In the second half of last year, North Korean hacking attacks targeted the National Election Commission, constitutional bodies, and government institutions. The National Intelligence Service discovered this and attempted to inspect for information leaks and system safety, but the National Election Commission strongly rejected the request, citing its independence as a constitutional body.”
President Yoon added, “Ahead of the April general election, we also requested improvements in problematic areas, but we could not confirm whether they were adequately addressed. Therefore, I instructed the Minister of National Defense to inspect the National Election Commission’s computer systems this time.”
#PresidentYoon #MartialLaw #NationalAddress #DemocraticParty #ConstitutionalAuthority #NationalSecurity #EspionageLaw #StateParalysis #LiberalDemocracy #OppositionParty
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- POSCO's Lee Si-woo, 40 Years in Steel Industry, Faces Task of Restoring Profitability Amid Business Downturn
- As the domestic steel industry faces worsening conditions such as weakening demand and an influx of low-cost Chinese steel, attention is focused on whether POSCO CEO Lee Si-woo can fulfill the critical task of restoring profitability amid business struggles.
Lee, a veteran with extensive experience in steel production and field operations, was appointed as the sole CEO in March this year, tasked with improving profitability. Industry experts, acknowledging his field-oriented expertise, refer to him as a “hands-on expert.”
Amid the escalating steel industry crisis, all eyes are on CEO Lee Si-woo and whether he can restore profitability amid worsening business conditions.
Since his appointment, several challenges have emerged, including declining profitability, safety issues at production sites, and conflicts with labor unions. As a production and operations expert, Lee is under pressure to resolve these issues and deliver tangible results during the downturn.
According to the steel industry on the 12th, POSCO is facing a severe business crisis due to stagnant demand and the influx of low-cost Chinese steel.
Lee, who became the sole CEO in March, has inherited the tasks of restoring profitability and enhancing competitiveness in the steel business, including decarbonization initiatives.
However, market conditions remain unfavorable. Despite efforts such as production cuts, facility upgrades, and inventory adjustments through night operations, it has not been enough to offset domestic demand stagnation and oversupply pressures. As a result, Lee has begun a structural reorganization, focusing on exiting low-profit businesses.
Citing worsening profitability, POSCO started selling its Zhangjiagang Pohang Stainless Steel Plant in China on November 7. The plant, POSCO’s first overseas stainless steel integrated facility, posted an operating loss of KRW 180 billion (USD 130 million) last year, more than double its KRW 80 billion (USD 58 million) loss in 2022.
Additionally, in November, POSCO shut down its Wire Rod Plant 1 at the Pohang Steelworks after 45 years and 9 months of operation. Since it began operations on February 28, 1979, the plant produced a cumulative 28 million tons of wire rod products, undergoing two major maintenance upgrades during its lifespan.
To further improve profitability, POSCO broke ground on November 5 on a rare gas plant in Gwangyang for semiconductor and display manufacturing, partnering with the Chinese company Zhongtai.
Lee is also pushing forward with hydrogen reduction steelmaking, a critical shift towards low-carbon steel production in response to increasing global calls for carbon neutrality. POSCO opened a Hydrogen Reduction Steel Development Center at Pohang Steelworks in January and plans to gradually replace its traditional blast furnaces with hydrogen reduction steelmaking by 2050.
However, challenges remain. The most urgent is restoring profitability.
Chinese steel manufacturers, facing declining domestic demand due to the real estate downturn since 2022, have flooded overseas markets with low-cost products. POSCO has not been spared from this competition.
POSCO's 2021 operating profit was KRW 6.65 trillion (USD 4.79 billion), with an operating margin of 17%, but this plummeted by 65.5% to KRW 2.08 trillion (USD 1.5 billion) in 2023. Last year’s operating profit fell further to KRW 2.08 trillion (USD 1.5 billion). For the first three quarters of this year, cumulative operating profit stands at KRW 1.15 trillion (USD 830 million), and it is expected to decline further by year-end.
Safety issues at production sites are also urgent. On November 10, an explosion and large fire occurred at Pohang Steelworks’ FINEX Plant 3, requiring five hours to extinguish. One worker inside the facility suffered burns to his hands and face.
While POSCO claimed there would be no disruption to operations by running other furnaces flexibly, it faced criticism for failing to address the psychological and material damages suffered by nearby residents. Pohang Steelworks has experienced four fires this year alone, resulting in injuries to five workers since Lee's tenure began.
Labor disputes remain another significant challenge. POSCO faces tensions with both its regular and subcontracted workers' unions.
The regular workers' union is threatening to strike for the first time in the company's 56-year history. On December 2, the union held a strike rally in front of the Pohang Steelworks headquarters, signaling their intent to strike if negotiations remain stalled.
Meanwhile, the subcontracted workers’ union is also pushing back, demanding an end to illegal dispatch practices. The union argues that POSCO continues to rely on subcontracted labor despite court rulings mandating fair treatment and regularization of these workers.
Lee Si-woo, born in 1960, graduated from Hanyang University with a degree in Metallurgy and joined Pohang Iron and Steel (POSCO) in 1985. Over his 40-year career at POSCO, he has built extensive expertise in steel production and operations. Lee gained international experience as head of POSCO’s India operations before being appointed co-CEO alongside former Vice Chairman Kim Hak-dong last year. Following Kim's resignation, Lee became the sole CEO in March.
Lee, known as a "POSCO man" and a hands-on veteran, now faces the daunting task of navigating the company through its most challenging period yet, balancing profitability restoration, on-site safety improvements, and labor conflict resolutions.
#POSCO #LeeSiwoo #steelindustry #profitability #Chineseimports #hydrogensteelmaking #labordisputes #safetyissues #businessrestructuring #carbonneutrality
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- Intensified 2025 Redevelopment Market: Lee Han-woo Aims to Keep Hyundai E&C on Top
- As competition in the domestic urban redevelopment market is expected to intensify, the burden on Lee Han-woo, Executive Vice President and CEO of Hyundai Engineering & Construction (E&C), is also growing.
Recognized for his expertise in housing, Lee was chosen as the new CEO and is expected to make achieving Hyundai E&C's seventh consecutive year as the top urban redevelopment contractor in 2025 a key management goal.
According to trends in the construction industry on the 11th, one of the most notable changes this year has been the replacement of CEOs at major construction companies in response to the prolonged economic downturn.
Following the regular general shareholder meetings in March, six out of the top 10 construction companies ranked by the Ministry of Land, Infrastructure, and Transport’s construction capability evaluation either appointed or changed CEOs.
Hyundai E&C, Daewoo E&C, Hyundai Engineering, and HDC Hyundai Development Company replaced their CEOs during year-end personnel reshuffles, while DL E&C and SK Ecoplant appointed new CEOs in July.
It is considered rare for more than half of the leading construction companies to change their CEOs in a single year. Just a year ago, when concerns over project financing (PF) contingent liabilities were severe, only three companies—POSCO E&C, Lotte E&C, and GS E&C—underwent leadership changes in their 2023 personnel reshuffle, with GS E&C transitioning to owner-led management.
A closer look at the new CEOs shows a noticeable rise of executives with financial expertise. However, Lee Han-woo of Hyundai E&C is the only one evaluated as continuing the housing specialization tradition, similar to former President Yoon Young-joon.
Since late 2022, Lee has led Hyundai E&C’s housing business division, earning recognition as a housing expert. After joining Hyundai E&C in 1994, he has held key roles such as head of the Building Planning Office, head of the Building and Housing Support Office, and head of Strategic Planning, showcasing a balance of field experience and expertise in strategy and planning.
The Hyundai Motor Group stated, “Lee is expected to lead the paradigm shift in the construction industry.”
Given his accumulated experience, Lee’s primary task is expected to be maintaining competitiveness in the housing business.
The urban redevelopment sector, where Hyundai E&C is seen as having a competitive edge, is a key focus area for Lee.
Hyundai E&C is on track to achieve the top spot in annual urban redevelopment project contracts for the sixth consecutive year. For Lee, extending this record to seven years in his first year as CEO would hold significant meaning for both him and the company.
As of this year, Hyundai E&C has secured KRW 6.0612 trillion (USD 4.37 billion) in new orders. Considering the gap with POSCO E&C, which is in second place with KRW 4.7191 trillion (USD 3.4 billion), and the remaining project selections, Hyundai E&C has virtually secured its top position.
However, the increasing intensity of competition for urban redevelopment orders in the construction industry is a burden. This suggests that Lee’s task of maintaining the top position in new urban redevelopment orders will not be easy.
Recently, urban redevelopment projects have gained prominence in the housing business as they are relatively free from concerns over PF contingent liabilities and unsold housing units. With an increasing number of old residential complexes over 30 years old in South Korea, urban redevelopment is regarded as a stable business with high potential to enhance housing brand value in key areas.
Although it was initially predicted that the prolonged housing market recession would make construction companies more cautious in bidding for urban redevelopment projects, the market has expanded further this year, as shown by contract performance.
According to the construction industry, as of this date, the total value of urban redevelopment orders (based on contractor selection) secured by the top 10 construction companies this year is estimated at KRW 25.05 trillion (USD 18.06 billion), already surpassing the annual total of KRW 20.04 trillion (USD 14.46 billion) from last year.
By company, while two firms (Lotte E&C and HDC Hyundai Development) failed to reach KRW 1 trillion (USD 722 million) in orders last year, all construction companies have secured orders exceeding KRW 1 trillion this year.
Additionally, Samsung C&T, ranked first in construction capability, is expected to turn more aggressive in its bidding strategies, leveraging its “Raemian” brand power. Observers predict an even more competitive race for urban redevelopment projects next year.
The upcoming result of the bidding for the Hannam District 4 Redevelopment Project (Hannam 4 Urban Renewal Promotion District Housing Redevelopment Project), about a month away, is seen as both an opportunity and a burden for Lee.
The Hannam District 4 redevelopment project involves constructing 2,331 residential units and ancillary welfare facilities in the Bogwang-dong area of Yongsan-gu, Seoul. The contractor selection general meeting is scheduled for January 18, 2025, with the estimated construction cost set at KRW 1.5724 trillion (USD 1.13 billion). It is considered the final battleground of the Hannam New Town redevelopment area.
Given that Hyundai E&C and Samsung C&T are competing for the first time in 17 years for this project, it has garnered the most attention in the urban redevelopment industry over the past two to three years.
After the bidding deadline, Hyundai E&C and Samsung C&T have each emphasized collaborations with globally renowned architects, launching a competition focused on high-end designs. Recently, both companies have proposed bold financial terms to win the favor of union members.
Hyundai E&C proposed a construction cost of KRW 1.4885 trillion (USD 1.07 billion), which is KRW 86.8 billion (USD 62.6 million) lower than the union’s suggested amount, emphasizing that this would reduce the burden on each union member by approximately KRW 72 million (USD 52,000). It also highlighted a commitment to guaranteed completion.
Samsung C&T proposed terms allowing union members to pay their contributions not at the time of move-in but four years later, aiming to provide more financial flexibility. It also guaranteed a minimum relocation cost of KRW 1.2 billion (USD 867,000).
If Lee secures the Hannam District 4 redevelopment project, Hyundai E&C’s housing business is expected to gain significant momentum early in his tenure.
The former CEO, Yoon Young-joon, appointed in 2020, also demonstrated sincerity to union members during the bidding for the Hannam District 3 redevelopment project, which Hyundai E&C won in June of the same year.
Conversely, failure to secure the Hannam District 4 project, regarded as a precursor to the Apgujeong redevelopment project, could mark a disappointing start to Lee’s tenure.
During Lee’s term, major urban redevelopment projects are expected to continue, solidifying Hyundai E&C’s position in Seoul’s housing market.
Following the near-completion of redevelopment in areas such as Heukseok New Town, Noryangjin New Town, and Hannam New Town, major projects, including the KRW 6 trillion (USD 4.34 billion) Apgujeong redevelopment complexes, the highly sought-after Seongsu Strategic Redevelopment District, and the Yeouido redevelopment project, are preparing to select contractors sequentially.
The reconstruction of Mok-dong New Town Apartments (complexes 1 to 14), which house over 26,600 units, is also expected to enter the contractor selection stage as early as next year.
#LeeHanwoo #HyundaiEC #UrbanRedevelopment #HousingBusiness #Hannam4Project #ConstructionIndustry #HyundaiMotorGroup #SeoulRedevelopment #ResidentialConstruction #ApgujeongReconstruction
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- Shin Hak-cheol Survives Industry Shake-Up, Accelerates LG Chem's Business Restructuring
- Shin Hak-cheol, the Vice Chairman and CEO of LG Chem, is expected to accelerate the company’s business restructuring.
Shin plans to enhance the portfolio of the petrochemical business while focusing on developing three new growth engines: battery materials, biotechnology, and sustainability. To fund these initiatives, LG Chem secured approximately KRW 1.1 trillion (USD 793.4 million) last year by selling its polarizer and materials businesses.
Attention is now on whether Shin, who has been leading LG Chem since 2018, can successfully implement his portfolio revival strategy and establish a foundation to overcome the structural crisis in South Korea’s petrochemical industry.
According to reports from the petrochemical industry on the 11th, South Korean chemical companies that rely heavily on basic feedstock businesses—such as producing ethylene, propylene, butadiene, and BTX—are facing an escalating management crisis.
This is due to China’s expansion of its petrochemical facilities under its self-sufficiency policy, flooding the market with low-cost petrochemical products. Additionally, Middle Eastern refineries are investing in crude oil-to-chemicals (COTC) facilities to address declining oil demand, leading to a prolonged oversupply situation in the region.
Companies such as Lotte Group, Hanwha Group, and SK Group have responded to the massive losses in their chemical affiliates by replacing many of their chemical division executives during this year’s personnel reshuffle.
While a reshuffle was also anticipated at LG Chem, LG Group Chairman Koo Kwang-mo reappointed Shin Hak-cheol last month.
This move suggests that Koo has tasked Shin, who is leading the company’s portfolio restructuring, with accelerating structural improvements.
Accordingly, Shin is expected to focus even more on fostering LG Chem’s “three new growth engines”: battery materials, new drugs, and sustainability.
The three new growth engines have been Shin’s key initiatives since 2021, with more than 60% of the company’s total investments directed toward these areas.
In the battery materials sector, LG Chem aims to expand its annual cathode material production capacity from 140,000 tons in 2024 to 200,000 tons by 2026. It also plans to increase revenue from battery manufacturers other than LG Energy Solution to 40%.
Some speculate that the company may delay its cathode material investment plans due to prolonged stagnation in electric vehicle (EV) sales and concerns over potential cuts to EV subsidies if Donald Trump regains the U.S. presidency.
However, during his visit to the United States on March 9 (local time), Shin indicated that the cathode material plant construction in Tennessee, which began at the end of 2023, will remain largely unaffected by changes in U.S. political leadership.
In the pharmaceutical sector, LG Chem announced its goal to expand the number of new drug candidates in oncology, immunology, metabolism, and diabetes from 12 in 2023 to 20 by 2030. The U.S. pharmaceutical company AVEO, acquired for approximately KRW 800 billion (USD 577.5 million) in early 2023, is central to strengthening LG Chem’s oncology-focused drug pipeline.
The sustainability business is closely linked to upgrading the underperforming petrochemical sector. LG Chem aims to reduce its reliance on basic feedstock businesses while actively expanding its portfolio in recycled products, eco-friendly bio-materials, and renewable energy materials.
The existing petrochemical segment will also shift toward high-value-added products.
LG Chem plans to complete acrylonitrile-butadiene-styrene (ABS) plants in the United States and India this year and is considering further expansion investments. Additionally, the company recently announced plans to grow its automotive adhesive business to a scale worth several hundred billion KRW by 2030.
Some industry observers predict that LG Chem will intensify its search for mergers and acquisitions (M&A) targets to accelerate the development of its new growth engines. This speculation follows the anticipated promotion of Lee Ji-woong, who oversees M&A, during LG Chem’s year-end personnel reshuffle.
Alongside fostering the three new growth engines, Shin must also finalize the decision on whether to sell LG Chem’s naphtha cracking center (NCC) Plant 2 in Yeosu. Since late 2023, there have been persistent rumors of its sale, with reports indicating ongoing negotiations with Kuwait Petroleum Corporation.
Born in 1957, Shin Hak-cheol graduated from Seoul National University with a degree in mechanical engineering and rose to the position of Executive Vice President at 3M.
He was the first external recruit under LG Group Chairman Koo Kwang-mo’s leadership after Koo took over in 2018, breaking LG’s tradition of appointing internally promoted executives. Shin is regarded as a prime example of a meritocratic appointment. His retention as LG Chem’s CEO in this year’s personnel reshuffle has reaffirmed Koo’s strong trust in him, according to industry insiders.
After being appointed as a co-chair of the Summer Davos Forum in June, Shin stated, “LG Chem will accelerate its transition toward the three new growth engine businesses—battery materials, eco-friendly materials, and others—by collaborating with global leaders across various sectors, from advanced chemical materials to AI, energy, and healthcare.”
#ShinHakcheol #LGChem #BusinessRestructuring #BatteryMaterials #NewGrowthEngines #Sustainability #PetrochemicalIndustry #CathodeMaterials #AVEO #GlobalExpansion
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- Lee Hwan-ju, Driver of KB Financial’s Non-Banking, Aims to Regain ‘Leading Bank’ at KB Kookmin Bank
- Lee Hwan-ju, the nominee for KB Kookmin Bank’s next CEO, is emerging as a key figure in leading the Yang Jong-hee-led KB Financial Group.
In financial holding companies, banks play a core role, contributing significantly to performance while holding symbolic importance in terms of brand recognition and image.
Starting next year, Lee will spearhead Yang Jong-hee, KB Financial Group Chairman's broader vision of expanding non-interest income and enhancing corporate value through capital management. Key tasks for Lee include regaining KB Kookmin Bank’s “leading bank” status and normalizing global operations.
According to projections from the securities and financial industries on December 10, 2025 is expected to see a slowdown in profit growth across the banking sector due to an interest rate cut trend and strict household loan regulations.
Park Hye-jin, a researcher at Daishin Securities, noted in her 2025 banking industry outlook report, “Pressure on banks’ margins will continue into 2025. Financial authorities are likely to tighten household loan regulations further, and prioritizing the management of risk-weighted assets (RWA) will inevitably result in slower growth.”
Kim Do-ha, a researcher at Hanwha Investment & Securities, added, “While banks’ earnings volatility is low, the Bank of Korea is likely to make its second rate cut earlier than expected, which means that banks’ net interest margins (NIM) must be adjusted downward.”
Additionally, the recent emergency martial law incident has heightened domestic financial policy and political uncertainty, raising concerns about external credit reliability. Banks could see reduced activity not only in household loans but also in corporate lending and other traditional deposit and loan services.
Lee faces a heavier challenge of increasing non-interest income in response to stagnation in the bank’s core lending sector.
Synergy with non-banking affiliates will be critical for expanding non-interest income, and Lee is seen as the right candidate for this task.
The KB Financial Group CEO Nomination Committee (Daechuiwi) selected Lee as the next CEO of KB Kookmin Bank, emphasizing that maximizing synergy between banking and non-banking businesses is a key task.
The committee stated, “Lee demonstrated exceptional ability during his tenure as CEO of KB Life Insurance, successfully overseeing the integration of Prudential Life Insurance and KB Life Insurance and expanding into new markets like elder care.”
Lee has held key positions at KB Kookmin Bank for over 30 years, including Head of the Foreign Exchange Business Division, Head of the Personal Customer Group, and Vice President of the Corporate Planning Group. He also served as the first CEO of KB Life Insurance, successfully managing the integration of systems, improving performance, and achieving chemical unification of the company.
While serving as Chief Financial Officer (CFO) of KB Financial Group, Lee also took on roles such as a non-executive director at KB Kookmin Card and KB Securities, contributing to the growth of non-banking affiliates and earning recognition for his efforts. He was the first CFO to join the KB Securities board.
Recently, KB Kookmin Bank and other major commercial banks have been focusing on wealth management as a new growth driver.
As competition intensifies in the KRW 400 trillion (approximately USD 288 billion) retirement pension market, banks are placing greater emphasis on developing asset management products such as Exchange-Traded Funds (ETFs) and strengthening collaboration in customer asset management services, targeting not only high-net-worth individuals but also the broader market.
The group-wide synergy in digital competitiveness, including artificial intelligence (AI), is also essential. This is because the adoption of digital technology has become a necessity for maintaining competitiveness in domestic deposit and loan businesses and for entering global markets.
Strengthening the competitiveness of the non-banking portfolio is also a key management strategy emphasized by Chairman Yang Jong-hee.
In his New Year’s address, Yang set management goals to enhance trust among customers and markets across four areas: wealth management, investment operations, insurance, and global business, while also pushing for non-banking affiliates to become industry leaders.
Lee is also expected to focus on regaining KB Kookmin Bank’s leading bank position through financial management, including expanding non-interest income and improving cost efficiency.
KB Financial currently maintains its top position among the four major financial holding companies in terms of net profit.
However, KB Kookmin Bank has recently fallen behind in the “leading bank” competition. Until 2021, KB Kookmin Bank and Shinhan Bank were neck-and-neck in net profit rankings. KB Kookmin Bank claimed the leading bank title in 2019 and 2021, while Shinhan Bank took the top spot in 2018 and 2020.
However, Hana Bank rose to the top in 2022 and 2023 by strengthening its corporate finance capabilities, and Shinhan Bank currently leads the market in 2024.
In the first three quarters of this year, KB Kookmin Bank ranked third in cumulative net profit, following Shinhan Bank and Hana Bank, partly due to losses from Hong Kong H-Index-linked Equity-Linked Securities (ELS) in the first quarter.
Lee earned recognition for his management ability by stabilizing the integration process and achieving performance improvements following KB Life Insurance’s acquisition of Prudential Life Insurance. KB Life Insurance’s net profit increased by 88.7% in 2023.
Although net profit for the first three quarters of this year fell by 0.9% compared to 2023, the new solvency ratio (K-ICS), a key measure of insurers’ capital soundness, improved to 286.4% in the third quarter, up 9.4 percentage points year-over-year, demonstrating Lee’s financial management capabilities.
With his appointment as the CEO of KB Kookmin Bank under Yang Jong-hee’s leadership, Lee has solidified his presence within the group. By holding key roles in the bank, financial group, and non-banking affiliates, Lee has completed the “elite course” within KB Financial Group.
If Lee successfully restores KB Kookmin Bank’s performance and global operations to reclaim its leading bank status, his position within the group will become even stronger.
Lee, born in 1964, graduated from Sunrin Commercial High School and studied business administration at Sungkyunkwan University. He earned a master’s degree in business administration from the University of Helsinki in Finland.
He joined KB Kookmin Bank in 1991 and served as Head of the Foreign Exchange Business Division, Executive Director of the Personal Customer Group, and Vice President of the Corporate Planning Group. He became CFO of KB Financial Group and was appointed CEO of KB Life Insurance in January 2022. From 2023, he has served as CEO of KB Life Insurance. During his tenure as CFO, he worked closely with Chairman Yang Jong-hee, who was then Vice Chairman of the group.
#LeeHwanJu #KookminBank #KBFinancialGroup #YangJongHee #LeadingBank #NonInterestIncome #FinancialManagement #KBLifeInsurance #DigitalTransformation #GlobalBanking
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- Nexon Partners with Tencent to Target China, Lee Jung-hun Seeks to Overcome Domestic Slump
- Lee Jung-hun, CEO of Nexon, is intensifying efforts to target the Chinese market to offset the sluggish domestic gaming industry.
He has consistently emphasized 'hyper-localization' as the key focus of Nexon’s overseas business, underscoring the importance of customized localization strategies for each region. Currently, China has emerged as the most important overseas market for Nexon.
Accordingly, Nexon plans to collaborate with Tencent, the Chinese IT giant that has long managed the local service for Nexon’s flagship intellectual property (IP), the side-scrolling action role-playing game (RPG) 'Dungeon & Fighter'. The two companies will release new games based on the 'Dungeon & Fighter' IP in China.
According to industry reports on December 10, Nexon appears to be accelerating its strategy to penetrate the Chinese market using the highly successful 'Dungeon & Fighter' IP.
On December 9, Nexon announced that Tencent would manage the Chinese release of 'First Berserker Kazan', an action RPG based on the 'Dungeon & Fighter' IP.
Nexon’s strategy focuses on utilizing Tencent’s extensive operational experience with 'Dungeon & Fighter' in China to enhance localization.
Tencent began offering 'Dungeon & Fighter' in China under the title 'Dungeon and Warriors' (地下城与勇士) in November 2007.
On May 21, 2024, Tencent also began managing the Chinese service for 'Dungeon & Fighter Mobile'. The game’s immense popularity pushed Nexon’s Chinese revenue share 6 percentage points higher than its domestic revenue share in Q2 2024.
This trend continued into Q3 2024, where Nexon achieved its highest-ever quarterly revenue, with the Chinese revenue share surpassing the domestic share by 7 percentage points.
The increase in Chinese revenue was due to growth in both PC and mobile game sales in China during Q3 2024, while domestic PC and mobile game revenues declined.
This divergence resulted from contrasting revenue trends for 'Dungeon & Fighter' and 'MapleStory'.
Until Q4 2023, 'MapleStory' had maintained its position as the top domestic PC game for Nexon. However, following a probability manipulation controversy involving the in-game currency 'Cube' in January 2024, 'MapleStory' experienced a rapid decline in user numbers.
According to 'Meage', a site that tracks 'MapleStory' user statistics, the number of users dropped from 518,000 on January 4, 2024, to 302,000 as of December 5, 2024, marking a 41.55% decrease.
This decline in users led 'MapleStory'’s domestic revenue to fall, with the game being overtaken by the sports game 'FC Online' as Nexon’s top domestic title starting in Q1 2024.
As 'MapleStory', which has traditionally generated approximately KRW 400 billion (USD 288 million) annually, saw its revenue contribution decline, Nexon’s domestic revenues also decreased.
At Nexon’s Q3 2024 earnings announcement on November 12, Lee acknowledged the struggles, stating, 'MapleStory has faced significant challenges this year domestically. We will overhaul its business model and implement improvements starting next year.'
Despite declines in its primary domestic market, Nexon’s reliance on new 'Dungeon & Fighter'-based releases has become even more critical as the Chinese market has significantly driven overall revenue growth.
Reflecting this focus, Nexon has developed the largest number of new games based on the 'Dungeon & Fighter' IP among its upcoming titles.
In addition to 'First Berserker Kazan', which Tencent will publish, Nexon’s subsidiaries Neople and Nexon Games are also developing 'Project Overkill', a 3D action RPG, and 'Dungeon & Fighter Arad', an open-world action RPG, respectively.
Including the two currently serviced games and the three new titles under development, Nexon will ultimately offer a total of five games based on the 'Dungeon & Fighter' IP.
Lee previously outlined a future strategy of 'vertical growth' for Nexon, which expands blockbuster IPs into different genres. Among its upcoming titles, games based on the 'Dungeon & Fighter' IP remain the most numerous.
Ultimately, Lee’s vision appears to leverage the success of 'Dungeon & Fighter' in China to further solidify Nexon’s market position there.
In addition, Nexon announced in August that Tencent would also manage the Chinese release of 'The Finals' and 'Arc Raiders', two shooting games developed by Embark Studios, a Nexon-owned overseas developer.
An industry insider stated, 'With growing competition in the global gaming industry, Korean game companies are increasingly looking overseas for new opportunities. Given Nexon’s strong Dungeon & Fighter IP and its significant influence in China, it appears Nexon is intensifying its efforts to penetrate the Chinese market with new releases.'
#LeeJungHun #Nexon #DungeonAndFighter #Tencent #ChinaGamingMarket #LocalizationStrategy #ChineseRevenue #MapleStory #GameDevelopment #MobileGaming
