Data loading...

Tuna Giant Dongwon Aims For USD 14 Billion Revenue In 2020

When StarKist, a U.S. tuna producer, was sold in full by parent company Del Monte to Dongwon last October, Americans might have wondered who this Korean company and its mother entity, Dongwon Group, were.

But Dongwon Group, known for its canned tuna, has long been an established name in the local business world. It now hopes to repeat its performance on the global stage. Dongwon means “far from the East” in Chinese characters.

Founded in 1969, Dongwon has a total of 11 affiliates. The total sales and operating profit at the group last year amounted to around 3 trillion won and 200 billion won, respectively. The company targets 3.3 trillion won ($2.3 billion) in sales and 300 billion won operating profit for this year.

As is often the case with big companies, Dongwon’s success was built from scratch. One unique aspect of Dongwon, though, is that the empire was built “on the sea.”

Kim Jae-chul, the founder and chairman, was a captain on a deep-sea (pelagic) fishing boat when he discovered a way to enrich Korea, which at the time was mired in poverty.

He founded Dongwon Industries, and quickly grew the company into a deep-sea fishing powerhouse. Many locals associate Dongwon with canned tuna, a fixture on local tables.

But it was not known for that in the beginning. It began to produce canned tuna in 1982. Before that, Dongwon made its money from selling the tuna it caught to local fishery merchants and companies.

Since 2000, Dongwon Industries has been focused on fishing while Dongwon F&B, its spinoff, has been in charge of making and selling tuna and other fishery products.

Food is Dongwon’s main game.

Most of the affiliates Kim and his colleagues founded specialize in what we eat. They include Dongwon Home Food, a catering service, Dongwon Dairy Food, which handles milk and other dairy products, and Dongwon WinePlus, a wine importer and distributor. But the group also operates construction and telecommunication businesses through Dongwon Systems. Dongwon HRD and Dongyeong Cold Plaza are among the smaller affiliates.

Dongwon Group once expanded into the finance industry by taking over a brokerage in 1982. Formerly called Dongwon Securities, Korea Investment and Securities has grown into a top-five brokerage in Korea since then. The brokerage and other Dongwon financial affiliates broke away from the group in 2004 and have operated under the name Korea Investment Holdings. The two companies maintain informal ties.

Current law limits the ownership of a financial holding company by a conglomerate. Chairman Kim’s oldest son, Nam-gu, heads Korea Investment Holdings.

In April, the group, celebrating its 40th anniversary, held a group-wide event where the Vision 2020 was announced. According to the company’s mid-term goal, Dongwon will attain 20 trillion won (Usd 14 billion) in sales and a 20 percent return on equity by 2020.
To that end, Dongwon said it hopes to strengthen its distribution business and overseas businesses.

Some analysts say it is highly probable that the company will reach the goal.

“The StarKist takeover will create synergy among the Dongwon affiliates related to the tuna business,” said Kwon Dae-jung, chief analyst with the Korea Investors Service, a local credit rating agency.

Insiders also say the goal is not that ambitious, given the talent of the people who have led the group.

According to local analysts, Chairman Kim proved his world-class leadership last year when as head of the organizing committee, he spearheaded Korea’s successful effort to host the 2011 Yeosu Expo.

Park In-gu, vice chairman, is Kim’s right arm. Park was a high-ranking government official at the Ministry of Commerce before joining Dongwon. According to the group, Dongwon Precision turned from a headache into a cash cow under Park’s management. Park also fostered Dongwon F&B into a leading food company in less than a decade, the group said.

Kang Byung-won, another vice chairman, has assumed many leadership roles, from Dongwon Precision to Dongwon Industries to Dongwon Systems. Joining Dongwon in 1988, he has a reputation as well-connected leader who gets things done.
Kim Sang-kuk, vice chairman at Dongwon Industries, was once called a Dongwon Tuna missionary. He earned the nickname as the group’s passionate lead marketer. He introduced various new marketing gimmicks, and according to the company, also played a crucial role in raising the public recognition of Loex, the brand name for the group’s logistics service.

Like the chairman, Dongwon Industries President Park Boo-in was formerly a sea captain. A 15-year veteran on the bridge of deep-sea fishing vessels, he became head of Dongwon Industries in 2006.

Kim Hae-kwan, president at Dongwon F&B, was a well-known expert on the marketing of consumer goods at CJ Group before moving to Dongwon in 2006. Noticing a trend toward rising public awareness of health, he has tried to renew the image of Dongwon’s tuna cans into a healthy food, and so far has received a good response from consumers, the group said.

Park Gun-dong, president of the construction division at Dongwon Systems, has close to a three-decade management career in the construction business. He worked at Doosan Engineering and Construction before joining Dongwon Group in 2006.

Lee Gwan-yong, president of the telecommunication-precision division at Dongwon Systems, is one of the few names that carry weight in the local telecommunication industry. Before joining Dongwon last year, he led the telecommunication business at LG Electronics. At Dongwon Systems, he is leading a company-wide effort to lift competitiveness.

Kim Jae-seon, president at Dongwon Home Food, is a food industry veteran. He was head of Our Home, a leading meal service provider in Korea, before joining Dongwon in 2006.

Kim Myoung-kil, president at Dongwon Dairy Food, is an expert in the dairy industry. He worked at Namyang Dairy Products Co., a leading dairy company, and the Korea Dairy Industries Association. Dongwon Dairy Food is a new company that started after Dongwon took over Denmark Milk in 2005 and Haitai Dairy in 2006.

Shin Young-su, president at Samjo Celltech, a sauce and seasoning maker, is a hand-picked marketing expert within the group. Once the marketing head at Dongwon F&B, he was named the inaugurating head of Samjo Celltech when Dongwon took it over.

Donald J. Binotto, president at StarKist, is the first foreign CEO at Dongwon. The group hired him in the process of becoming a global company. He worked at Heinz and Del Monte, famous American food companies.

Richard S. Kim, president at Dongwon WinePlus, was a food marketer at Doosan Group. For several years before joining Dongwon in 2007, he tried his hand as an English instructor at a private language institute in Gangnam District, Seoul.