Among cement makers, Hanil Cement has the greatest market share as well as competitive prices and a high profit margin.
Korea is known around the world as an IT powerhouse. Headlines are often dominated by the newest high-tech gadgets or upcoming technologies. However, it’s useful to remember that the foundation of Korea’s accelerated economic growth - the so-called “miracle on the Han” - originated from more traditional fields, such as steelworks, shipbuilding and construction. And perhaps most representative of the smokestack industries is cement manufacturing - inconspicuous, tactile and indispensable.
Hanil Cement has been a local leader in the cement business since 1961, when it was founded as Korea’s second-ever cement manufacturer. From its start, Hanil Cement has been providing the building materials for decades of Korea’s real estate projects, and has now grown into a company with an annual production capacity of 8.1 million tons of cement, 24 subsidiaries including eight firms abroad and assets of 1.35 trillion won ($1.2 billion) as of 2009.
For experts and industry insiders, Hanil Cement is known as a dependable company with a redoubtable track record - it marked net profits of 40.4 billion won ($36 million) in 2009. Despite difficult conditions for the local construction industry, Hanil Cement cleared a net profit of 14.5 billion won ($ 4 million) in 2008.
Financial experts forecast a solid future for Hanil Cement even in the midst of a cement and construction materials industry beset by deteriorating operating conditions.
“Among cement manufacturers, Hanil Cement has the greatest market share as well as competitive prices and a high profit margin,” said Jung Bong-soo, chief analyst at Korea Investors Service.
“Since 2008, the cement industry has been struggling through adverse foreign exchange rates as well as a steady climb in the price of bituminous coal, the raw material for making cement. Hanil Cement has maintained its high productivity levels and retains a solid financial soundness. Even if the local cement industry goes into a double dip downturn in the near future as feared, Hanil Cement is the company that can weather it most well.”
Such a reputation did not materialize overnight. Company representatives explain that the company has maintained financial soundness since its founding - with 40-plus years of continuous surplus in profits.
Also, Hanil Cement was the first cement company to brand dry mortar, a substance that is much stiffer than common mortar and a viable substitute for regular cement. Remital, founded in 1991, is the company’s umbrella brand for over 40 products fitted to specific uses - such as floor plastering or bricklaying.
Unlike cement, which is mixed with sand on site, Remital comes pre-mixed with cement, sand and a special additive - and because of its easy usage and consistent quality, enjoys a dominant market share among similar products.
Hanil Cement has 24 subsidiaries, including Hanil Engineering & Construction, Hanil Industrial, Hanil Development and Seoul Land, an amusement park. Although its subsidiaries are at various states of solvency, Hanil Cement itself is seen by experts to be sound enough to remain largely unaffected.
Among many factories, the crown jewel of Hanil Cement’s factories remain its Danyang plant. Situated in a picturesque landscape famous for its natural sights, the Danyang factory pleases both, the eye and the investor’s report - with a manufacturing capacity of 8.1 million tons of cement, this mother plant handles almost all of the firm’s cement production.
In the long term, Hanil Cement sees the maintenance and reinforcement of buildings and civil engineering projects as its core area of growth. Moreover, the company is looking to develop Remital as a specialized brand with international appeal - and has already targeted the do-it-yourself markets of Japan and Mongolia.
Having established its position in the domestic market, Hanil Cement’s vision is to grow to a global company with competitive ability in foreign markets.
Since 2005, the company has been under the leadership of Huh Gi-ho, the president of Hanil Cement. The grandson of the late Huh Chae-kyung, the founder of Hanil Cement, Huh Gi-ho has been working in the family business since 1997 when he became a director of Hanil Cement.
Founder Huh Chae-kyung was born in Gaepoong, Gyeonggi, and emphasized diligence and internal stability in the spirit of the Kaesong merchants during the 17th and 18th century, who are remembered for their business savvy. This mindset helped established Hanil Cement as a hidden blue-chip company with a small debt ratio and loyal customers.
Huh Gi-ho, has continued the legacy of strong financial soundness and attention to research and development - with adoption of high-tech systems to stay ahead.
The current executive management of Hanil Cement is comprised of various backgrounds and careers. Some entered Hanil Cement during the Asian financial crisis, when many talents were in transit due to the rapidly transforming financial situation of many companies. One such person was Choi Byoung-gil, one of two current vice presidents, who entered the company in 1998 after working at Samsung C&T.
Because the company’s mother factory at Danyang, North Chungcheong is such an important center for the firm, at least two of its executives - Won In-sang, the other vice president of Hanil Cement, and Kwak Eui-young, an executive director, have previously held or now hold core positions at the Danyang plant.
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