Koo Yong-hoo, vice chairman of Kolon Group, has demonstrated his management capabilities by leading strong performances in key subsidiaries just three years after taking the helm. The restructuring strategy he has implemented is expected to bolster his succession efforts.
According to the Financial Supervisory Service's electronic disclosure system on August 7, Kolon Industries reported consolidated sales of 1.3565 trillion won and an operating profit of 98.7 billion won for the second quarter of this year. Compared to the same period last year, sales increased by 7.8% and operating profit surged by 118%. From the previous quarter, sales rose by 9.6% and operating profit grew by 59.5%.
This performance is seen as a reflection of the results from the restructuring strategy Koo has pursued in recent years. Since taking full control of the group in 2023, he has focused on streamlining low-profit or overlapping businesses and restructuring the portfolio around advanced materials and future growth sectors.
Notable restructuring examples include the full integration of Kolon Mobility Group, the merger of Kolon Industries and Kolon ENP, the consolidation of Kolon Global with MOD·Kolon LSI, and the launch of Kolon Spaceworks.
Particularly significant is the merger of Kolon ENP completed in April, which strengthened the business portfolio centered on high-value materials. This merger added engineering plastics to the existing industrial materials and chemicals business, laying the groundwork for long-term competitive strength.
Industry insiders believe that this improvement in performance will positively impact Koo's succession plans. While Koo is regarded as the de facto sole heir within the group, he does not yet hold shares in Kolon Corporation, the key to the group's control. The group's honorary chairman, Lee Woong-yeol, stated in 2018 upon his retirement that he would not pass on any shares unless Koo proved his management capabilities. Currently, Lee holds more than 50% of Kolon Corporation's shares.
Securing a basis for succession through performance improvement is seen as Koo's primary challenge for this reason. However, demonstrating results has not been easy. Since stepping into management, the group's scale has steadily expanded, but profitability improvements have not met expectations due to sluggish petrochemical market conditions and a downturn in the construction sector. There have been concerns that the effects of restructuring have only contributed to growth in scale.
Thus, the second-quarter results are significant as they alleviate some market concerns. However, challenges remain, including the global economic slowdown, delayed recovery in the petrochemical sector, and the burden of expanding investments in future growth businesses. The substantial inheritance and gift tax liabilities arising from the share transfer process are also seen as a key variable in the upcoming succession process.
An industry source noted, "It is true that there have been criticisms regarding slow profitability improvements compared to growth in scale. While this performance is meaningful in that it shows the effects of rebalancing, Koo must continue to deliver stable results and demonstrate structural profitability improvements going forward."
* This article has been translated by AI.
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