KLPGA Forced Break During Chuseok Holiday... What Kind of Company Is Daewoo Shipbuilding & Marine Engineering Construction?

Last Year’s 300 Million Deficit and This Year’s Profitability Decline Due to Raw Material Price Surge
Chairman Kim Yong-bin’s Consecutive Sports Moves Including Basketball Team Establishment Also Controversial
Turned to Deficit Last Year... Union Says "Many Employees Are Quitting the Company"

Daewoo Shipbuilding & Marine Engineering Construction is causing controversy by canceling the KLPGA Tour Elcrew Pro Celebrity ten days before the opening. The photo shows the Elcrew Pro Celebrity awards ceremony from last year.

[Asia Economy Reporter No Woo-rae] During the Chuseok holiday period, major domestic and international golf tournaments remained highly active. The Korean Professional Golfers' Association (KPGA) Tour garnered attention by successfully hosting the Shinhan Donghae Open in Japan. Lee Jeong-eun 6 (26), competing on the U.S. Ladies Professional Golf Association (LPGA) Tour, secured 4th place at the Kroger Queen City Championship, laying the groundwork for a comeback. Yang Yong-eun, who debuted on the U.S. Professional Golfers' Association (PGA) Champions Tour this year, announced his first runner-up finish.

Meanwhile, the Korean Ladies Professional Golf Association (KLPGA) Tour was the only one to halt operations. The 'Elcrew Pro Celebrity' tournament, scheduled to be held for three days from the 9th at Incheon Orange Dunes Yeongjong Golf Club, was abruptly canceled. KLPGA players, who had been pushing through the season with hardly any breaks, were unexpectedly forced into a hiatus.

Focus on the Board Meeting Amid Host vs. Golf Course Blame Game

The tournament's host is Daewoo Shipbuilding & Marine Engineering Construction, a mid-sized construction company known by the brand 'Elcrew.' The event was established last year and was set to hold its second edition this year.

The tournament attracted attention from its inception due to its unique format where professional players and celebrities form teams to compete. Last year, Yoo Hae-ran (21) was the inaugural champion.

The cancellation was announced on the 31st of last month by the KLPGA, stating it was "suddenly canceled due to the host's circumstances."

Daewoo Shipbuilding & Marine Engineering Construction cited unreasonable demands from the golf course as the reason for the cancellation. On the other hand, Orange Dunes Yeongjong Golf Club countered that Daewoo Shipbuilding & Marine Engineering Construction repeatedly delayed payment of the golf course lease deposit, leading to contract termination. The truth behind the dispute is still ongoing.

The KLPGA Tour plans to hold a board meeting to consider disciplinary actions. If the host's fault is confirmed, Daewoo Shipbuilding & Marine Engineering Construction will have to pay a penalty amounting to 75% of the total prize money of 700 million KRW, which is 525 million KRW.

Does the KLPGA Tour Have the Capability to Host Events? Growing Doubts Surround Daewoo Shipbuilding & Marine Engineering Construction

Daewoo Shipbuilding & Marine Engineering Construction is a mid-sized construction company originating from Serim Development Industry in 1969. It became a subsidiary of Daewoo Shipbuilding & Marine Engineering in 2006 and changed its name to Daewoo Shipbuilding & Marine Engineering Construction the following year.

However, as its parent company Daewoo Shipbuilding & Marine Engineering faced management difficulties, Daewoo Shipbuilding & Marine Engineering Construction was put up for sale. The company that acquired it was Korea Technology, which had no prior connection to construction. At the end of 2020, Korea Technology acquired all remaining shares of Daewoo Shipbuilding & Marine Engineering Construction held by Star Mobility and incorporated it as a subsidiary. Currently, Korea Technology holds up to 99% of the shares of Daewoo Shipbuilding & Marine Engineering Construction and plans to hold an extraordinary shareholders' meeting on October 7 to deliberate and approve a merger with Daewoo Shipbuilding & Marine Engineering Construction.

The problem lies in the management status of Daewoo Shipbuilding & Marine Engineering Construction. In 2015, when it was a subsidiary of Daewoo Shipbuilding & Marine Engineering, it ranked 41st in the construction industry's construction capacity evaluation. This year, it has fallen to 83rd.

Although it focuses on domestic architecture, housing, and civil engineering projects, it recorded a net loss of 298.25 million KRW on a consolidated basis last year, turning to a deficit. While the loss itself is not large, the sharp rise in raw material prices has reportedly expanded the loss margin further in the first half of this year.

Owner Pouring Money into Sports Despite Large-Scale Employee Resignations

Kim Yong-bin, Chairman of Daewoo Shipbuilding & Marine Engineering Construction, is speaking at the curling national team press conference.

Kim Yong-bin, chairman of Daewoo Shipbuilding & Marine Engineering Construction, is also embroiled in controversy over his sports marketing activities. He began his involvement in the sports world in 2018 as the deputy head of the South Korean delegation at the Jakarta-Palembang Asian Games. Since then, he has served as the 1st Senior Vice President of the Asian Canoe Confederation (ACC), a member of the Korea Sports Council's Inter-Korean Sports Exchange Committee, and deputy head of the South Korean delegation at the Beijing Winter Olympics. He currently serves as president of the Korea Curling Federation and director of the Korea Sports Council. Notably, in the first half of this year, he made headlines by acquiring the professional basketball team Goyang Orion. The acquired basketball team was rebranded with Carrot Insurance as the naming sponsor and will participate in the Korean Basketball League (KBL) starting from the 2022-2023 season opening in October.

Last month, Chairman Kim held a team launch ceremony at the Goyang Gymnasium in Gyeonggi Province, securing Carrot Insurance as the naming sponsor. The team will participate in the Korean Basketball League (KBL) from the 2022-2023 season starting in October. Through the team launch ceremony, Chairman Kim expressed his intention to expand into professional football's K League 2 and women's professional volleyball.

However, there is considerable opposition within the company to Chairman Kim's actions. The Daewoo Shipbuilding & Marine Engineering Construction labor union criticized, "Employees at Daewoo Shipbuilding & Marine Engineering Construction sites are living a hellish daily life, chased by creditors," adding, "The reality is that many employees are quitting and choosing to move to other jobs."

According to data from the National Pension Service, 146 employees resigned from Daewoo Shipbuilding & Marine Engineering Construction from the beginning of this year through July. Based on the average number of employees during the same period, the resignation rate is approximately 32.7%.