[Person人] The Ambition That Swallowed a Whale... "Next Goal is to Become a World-Class Top Construction Group"

Jung Chang-sun, Chairman of Joongheung Group

Jung Chang-sun, Chairman of Joongheung Group

"February 28, 2022, will be recorded as a historic day when Daewoo Construction embarks on a new and vigorous start. We will nurture it into a top-tier leader in the construction industry."

This confident message was delivered by Chung Chang-sun, Chairman of the Jungheung Group, to employees on the 2nd, after completing the acquisition of Daewoo Construction. Chairman Chung emphasized, "We will implement independent and responsible management based on trust and cooperation, not control and checks." The reason Chairman Chung personally explained independent and responsible management seems to be his awareness of the market's skepticism about the chemical integration between the two companies after the acquisition. He promised, "To achieve a new leap for Daewoo Construction, we will consolidate capabilities and stabilize the organization to recreate the former glory of Daewoo, which dreamed of global management."

For now, Chairman Chung's goal is to leap into a global construction company. However, many challenges await him. An industry insider said, "While the acquisition of Daewoo Construction was smoothly accomplished, chemical integration after the acquisition and ethical management befitting its status will emerge as new challenges for Jungheung Group, which has focused on external growth."

Jungheung has attracted attention in the industry for its rapid growth, but paradoxically, there have been concerns that this rapid growth could become an obstacle. An industry insider said, "Behind Jungheung's rapid growth, it is also true that negative labels such as swarm bidding and poor construction have followed." Swarm bidding is a loophole where multiple paper companies are created to increase the chances of winning bids, circumventing the restriction of bidding opportunities per company. The swarm bidding during the land sale process in Sejong City is still talked about today. It is also difficult to deny controversies over poor construction. In apartments supplied by Jungheung Construction in the Shindae District of Suncheon City, which they claimed would be a 'luxury residential complex,' as many as 180,000 defect reports were filed by 2017. Poor construction issues such as leaks and wall tilting in 2019 in Busan Myeongji International New City and Cheongju Bangseo District were also reported through the media.

Another task is to make the numerous affiliates and complex governance structure transparent and simplified. With the full revision of the Fair Trade Act passing the National Assembly plenary session in December 2020, the number of Jungheung Group companies subject to internal transaction regulations increased. The dozens of affiliates and tangled governance structure raise concerns that they could become obstacles not only to future succession work but also to Environmental, Social, and Governance (ESG) management. Recognizing these criticisms, Chairman Chung promised in his message that day, "We will gradually establish an ESG management system and fulfill responsibilities befitting the status of a leading company."

When Jungheung Group announced the acquisition of Daewoo Construction, the prevailing opinion was that "the shrimp swallowed the whale." However, Jungheung countered, saying, "The whale swallowed the whale." The source of confidence lies in Chairman Chung's management philosophy. On his desk at Jungheung Group headquarters in Sinan-dong, Buk-gu, Gwangju, there is a cash flow statement for three years. It is to plan funds for 36 months in advance and check every three months. In the industry, Chairman Chung's 'Three No (不) Principles' are well known: 'No purchase of non-business assets,' 'Avoid giving guarantees as much as possible,' and 'Do not take on projects expected to run at a loss.' Although some evaluate this as a somewhat conservative management strategy, Chairman Chung believes that this financial management is what made today's Jungheung Group.

Another key keyword for Jungheung's growth is Chairman Chung's 'crisis management' approach. When the sale of residential land in Sejong City began in 2007, leading large construction companies acquired residential land. However, administrative setbacks and the global financial crisis hit Sejong City's development with a cold wave. Large corporations returned the land they had acquired, citing low profitability. In contrast, Jungheung Group mobilized its affiliates to secure land. Chairman Chung bet that Sejong City would become like Gwacheon in Gyeonggi Province. The prediction was correct. It was an opportunity for Jungheung, which had been a local company in Gwangju, to step onto the national stage.

It is said that the first job Chairman Chung took on at a construction site was as a 'plastering assistant apprentice.' This was in 1962 when he was 19 years old. The company grew into a leading construction firm that acquired Daewoo Construction 39 years later. Chairman Chung's dream of a 'global construction company' is still ongoing.

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