Dongkuk Steel, Brotherly Management Returns After 8 Years... Brothers Were Strong

Split into Two Entities: Holding Company and Business Corporation
Chairman Jang Se-ju Returns to Management After 8 Years

Dongkuk Steel is starting sibling management by establishing a holding company and reorganizing the group structure. Chairman Jang Se-ju of Dongkuk Steel, whose employment restrictions were lifted last August through a special presidential pardon, and his younger brother, Vice Chairman Jang Se-wook, who has been leading the group in his absence, must accelerate efforts to secure new businesses and normalize the group through strengthening management rights.

On the 12th, Dongkuk Steel approved the company split plan at an extraordinary general meeting of shareholders and passed the agenda to appoint Chairman Jang as an inside director. Accordingly, Dongkuk Steel will be divided into the surviving company Dongkuk Holdings and the newly established companies Dongkuk Steel and Dongkuk CM, effective June 1.

▲Jang Se-ju, Chairman of Dongkuk Steel (left), Jang Se-wook, Vice Chairman (right)

Dongkuk Holdings will serve as the group's strategic control tower, adjusting the business portfolio and discovering future growth engines. It plans to establish a CVC (corporate venture capital) under the holding company, oversee new investments in steel-related materials, parts, and equipment industries, and promote new businesses in IT and logistics sectors.

Dongkuk Steel will be responsible for the hot-rolled steel business. Its main products are coil rebar used in construction sites and heavy plates supplied to shipbuilders. After the split, the company has set a strategy to grow into a carbon-neutral steel company by producing products using electric furnaces instead of traditional blast furnaces that use fossil fuels.

The color steel sheet business, which has been a core product, will be handled by Dongkuk CM. Dongkuk CM plans to execute 'DK Color Vision 2030' to solidify its dominant position in the color steel sheet market and achieve sales of 2 trillion KRW and global sales of 1 million tons by 2030.

The division into a holding company and business corporations is seen as another turning point for the company. Founded in 1954, Dongkuk Steel will celebrate its 69th anniversary on July 7. Due to deteriorating financial health, Dongkuk Steel Group signed a financial structure improvement agreement with the Korea Development Bank in 2014, and in 2015, it had to integrate steel businesses such as Dongkuk Steel, which handled the hot-rolled business, and Union Steel, which was responsible for the cold-rolled business. During this process, the company sold its office building, Ferrum Tower, and even had to sell the Brazilian steel mill, a 'long-cherished project' of the late Honorary Chairman Jang Sang-tae.

▲Ferrum Tower located in Jung-gu, Seoul, where Dongkuk Steel headquarters is situated, and Chairman Jang Se-ju (bottom left)

Within the group, there are expectations that the return of Chairman Jang to management after eight years will accelerate the normalization of group management. Chairman Jang, who joined Dongkuk Steel in 1978, succeeded Honorary Chairman Jang and became CEO in 1999. However, he was imprisoned on charges including embezzlement and breach of trust, was released on parole in 2018, and had employment restrictions for the past five years.

Vice Chairman Jang Se-wook, who took responsibility for the group in place of his elder brother, is a graduate of the Korea Military Academy (41st class) and retired as a major before entering management later. Since becoming CEO of Dongkuk Steel in 2015, Vice Chairman Jang has been praised for steadfastly pushing forward group restructuring.

The debt ratio of Dongkuk Steel, which reached 240% in 2014, dropped to 96% at the end of last year. At the general meeting of shareholders in March, Vice Chairman Jang said, "We will complete the business structure reorganization work that has been ongoing for eight years," and added, "We will discover new businesses in the materials, parts, and equipment sector that can create synergy with the steel business."

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