Hanjin Announces Mid-to-Long-Term Management Strategy to Achieve 3.5 Trillion KRW in Sales by 2025

[Asia Economy Reporter Dongwoo Lee] Hanjin announced a mid- to long-term management strategy aiming to achieve sales of 3.5 trillion KRW by 2025.

On the 17th, Hanjin presented its goal to strengthen parcel delivery, logistics, and global businesses by its 80th anniversary in 2025, achieving sales of 3.5 trillion KRW, operating profit of 175 billion KRW, and an operating profit margin of 5%. This represents an average annual sales growth of 9.6% and a 1.7-fold increase in operating profit compared to last year.

To this end, Hanjin plans to maximize corporate value by ▲leading the future lifestyle parcel delivery market ▲providing customer-tailored comprehensive logistics solutions ▲securing global supply chain management capabilities.

To improve profitability, the company intends to reduce low-competitiveness businesses through sales and consolidation, and secure mid- to long-term investment funds by selling underutilized assets. It will strengthen its own competitiveness through profitability enhancement, focused investment, and nurturing.

For establishing governance and enhancing corporate value, Hanjin plans to faithfully fulfill social responsibilities by improving governance and organizational culture, strengthening management transparency, and enhancing shareholder value.

For sustainable management and new value creation, the 12 key initiatives include strengthening fundamentals through cash flow-centered business operations, enhancing financial soundness such as credit rating upgrades, and creating a smart business environment through IT system upgrades.

In particular, Hanjin will continue creating shared value (CSV) by leveraging its logistics capabilities to cooperate with social members and generate profits. It will secure future growth competitiveness through discovering new businesses and operating the Hanjin Open Innovation Hub.

The parcel delivery business will maintain its solid No. 2 market share by expanding strategic customer value chains, acquiring new clients, strengthening platform business such as ‘one-click’, and enhancing IT system-based operational capabilities including parcel system modernization.

The logistics business will expand terminal infrastructure at Busan and Incheon New Port to stably secure volumes from global shipping alliances. It will also prepare new growth engines by pioneering new land transportation markets related to eco-friendly and growth industries, and differentiate services by strengthening comprehensive logistics services such as port and delivery and fulfillment using nationwide logistics infrastructure.

The global business will expand volumes for global e-commerce and manufacturers by utilizing the newly opened Incheon Airport GDC, and enhance competitiveness in forwarding, international express, airline sales agency (GSA), and air-linked cargo transportation services (RFS) through strengthened collaboration with group companies. Additionally, it plans to expand its global network by further advancing into Southeast Asian regional hubs, thereby enhancing global supply chain management capabilities.

650 Billion KRW Investment Planned to Achieve Mid- to Long-Term Goals

Hanjin has established a mid- to long-term investment plan totaling 648 billion KRW by 2025 to achieve its goals. Starting with 509.4 billion KRW for expanding parcel delivery capacity and automating facilities including the construction of the Daejeon Mega Hub Terminal, it will invest 61.2 billion KRW in securing additional berths at Busan and Incheon container terminals and expanding logistics center infrastructure, 23 billion KRW for IT system upgrades, and 54.4 billion KRW in land transportation and cargo handling equipment.

To maintain financial soundness, Hanjin plans to minimize borrowings and secure funds through profit generation from operations, capital raised from a paid-in capital increase and convertible bond issuance executed in 2020, and continuous sales of low-utilization real estate and securities unrelated to its core business or projects.

Last year, to enhance profitability and focus investment and nurturing on core businesses, Hanjin sold its less competitive rental car business to Lotte Rental. Going forward, it will consolidate or reduce loss-making subsidiaries and low-profit businesses with low future growth potential and competitiveness.

Hanjin plans to continue efforts to improve profitability in land transportation, forwarding, and shipping businesses, while focusing on profitability enhancement in the fuel business linked to its existing operations and infrastructure in Incheon, Daejeon, and Pohang. In the mid- to long-term, it will pursue strategies considering changes in the eco-friendly energy industry.

For governance improvement, in 2020, Hanjin separated the roles of CEO and chairman of the board and expanded the number of outside directors to five. It has strengthened the independence of the board and its committees by appointing outside directors as members of each board committee.

This year, Hanjin plans to continuously improve systems to enhance management transparency by expanding the current Governance Committee into an ESG Committee, establishing a Safety Committee, and considering the introduction of board evaluations centered on outside directors.

To enhance shareholder value, Hanjin has raised dividend levels and actively conducted shareholder communication and corporate information disclosure activities. In 2021, it repurchased treasury shares, prepared mid- to long-term dividend policies, and strengthened responses to ESG evaluation items by the Korea Corporate Governance Service to continuously enhance shareholder value.

Hanjin stated, "Through achieving Vision 2025, which includes these initiatives, we plan to improve management efficiency and continuously maximize shareholder value, advancing as a global smart logistics solution company leading the logistics industry."

This content was produced with the assistance of AI translation services.