HMM Kim Kyung-bae Ship Sets Sail... Challenges Are Business Structure and Labor Relations

Diversification of Overseas Shipping Companies' Business Structures... Focused Only on HMM Container Ships
Labor-Management Conflict Over Wage Normalization... "TF Operation Planned"

[Asia Economy Reporter Yoo Hyun-seok] HMM is starting under the leadership of CEO Kim Kyung-bae. Diversifying the business structure and resolving labor-management issues are cited as Kim's main tasks. Although the company recorded its highest-ever performance, the sales structure focused solely on containers is seen as a factor lowering performance stability, and since a long wage freeze nearly led to a strike last year, forming a harmonious labor-management relationship has also become important.

On the 30th, HMM announced that at the shareholders' meeting held the previous day, former Hyundai Wia President Kim was newly appointed as an inside director and was appointed as CEO by the board of directors. The term is two years.

Newly appointed CEO Kim graduated from Yonsei University and joined Hyundai Precision (now Hyundai Mobis). He served in the Secretariat of the Honorary Chairman of Hyundai Group, then as Head of Planning at Hyundai Mobis, Head of Secretariat at Hyundai Motor Group, CEO of Hyundai Glovis, and CEO of Hyundai Wia.

Diversifying the business structure is Kim's top priority. Last year, HMM recorded its highest-ever performance. Operating profit increased by 652% year-on-year to 7.3775 trillion won, and sales rose 115% to 13.7941 trillion won. Both sales and operating profit were the highest since the company's founding. However, 93.87% of total sales came from the container sector. Bulk cargo accounted for only 4.96%, indicating a concentrated sales structure.

Recently, global port companies have been expanding their business from port-to-port to door-to-door services, providing comprehensive logistics services. In particular, the Shanghai Containerized Freight Index (SCFI) recorded 5109.60 in January this year but declined to 4434.07 on the 25th of this month, showing a downward trend. This indicates the need for business structure diversification to stabilize performance and sustain growth.

An industry insider said, "There are areas to consider regarding comprehensive logistics businesses such as securing ports," adding, "Since overseas companies are diversifying their business structures, HMM also needs to consider this."

Additionally, fostering a harmonious relationship with the labor union is an important aspect. Last year, HMM came close to a strike due to labor-management conflicts over wage normalization. Since HMM's labor and management have agreed to operate a task force (TF) for wage normalization, Kim's role is expected to become increasingly important.

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