Jang Se-joo, former chairman of South Korea’s Dongkuk Steel Mill Co., has returned to the top post after an eight-year hiatus as the steelmaker is turning into a holding company to facilitate renewed growth via M&As and overseas expansion.
Dongkuk, which specializes in color coated steel products, held a shareholders’ meeting on Friday and approved his reinstatement as chairman and a registered director.
Shareholders also approved a company plan to turn it into a holding company, tentatively named Dongkuk Holdings, and spin off the existing steelmaker as two subsidiaries – Dongkuk Steel, which will focus on the hot-rolled business, and Dongkuk CM, a company that will manufacture cold-rolled steel products including color steel.
The holding company structure will take effect on June 1. The three new companies will be relisted on the Korean bourse on June 16.
Existing shareholders will receive new shares of Dongkuk Holdings, Dongkuk Steel and Dongkuk CM at a ratio of 16.7%, 52% and 31.3%, respectively.
“It is the biggest structural change since Dongkuk was established in 1954,” said a company official.
COMEBACK IN 8 YEARS
Jang, a third-generation leader of the family-run steel conglomerate, joined Dongkuk as a rank-and-file employee in 1978 and rose to the top as chairman in 2001.
But he resigned from the top post in 2015 after he was convicted for embezzlement and breach of trust related to his overseas gambling. He was paroled in 2018 but largely stayed out of the public eye.
Last year, Jang Se-joo was pardoned by the government on the occasion of National Liberation Day, ridding him of all legal shackles that blocked his return to work.
During his absence, his younger brother Jang Se-wook has run Dongkuk Steel Mill as vice chairman.
“My younger brother will continue to work as Dongkuk’s chief executive officer,” the returning chairman said.
As the holding company’s chairman, Jang Se-joo is expected to lead the group’s efforts to explore future growth engines and actively look for M&A targets for growth.
At last year’s annual shareholders’ meeting, Vice Chairman Jang Se-wook said if the steelmaker turned into a holding company, it would create in-house venture firms and diversify its business portfolio to the materials, components and equipment businesses as well as specialty steel manufacturing for electric cars.
UPS AND DOWNS
Under Chairman Jang Se-joo’s leadership in the early 2000s, the steelmaker had ups and downs.
During his term, Dongkuk actively pursued overseas expansion, which led to the creation of Companhia Siderurgica do Pecem steel mill, a joint venture with Brazil’s mining giant Vale S.A. and Korea’s top steelmaker POSCO.
Last year, Dongkuk sold off its 30% stake in the Brazilian JV, commonly known as CSP, after turning it into a profitable company.
Dongkuk Steel, which runs factories in Mexico, India and Thailand, has said it would build more color steel plants in the US and Europe by 2030.
In Mexico, it opened a second color coated steel plant in March.
Color coated steel plates are in increasing demand from a variety of business sectors ranging from home electronics companies to construction firms and even chipmakers, as consumers have become more self-assertive and want to have their daily goods in style.
Vice Chairman Jang Se-wook said the company aims to sell 1 million tons a year of color steel with annual sales of 2 trillion won ($1.5 billion) by 2030.
The returning chairman, Jang Se-joo, is Dongkuk Steel’s single largest shareholder with a 13.9% stake. His younger brother has an 8.7% stake.
