Dongwon Industrial Becomes Holding Company of Dongwon Group... Strengthening Vice Chairman Kim Nam-jung's Leadership

Dongwon Industries-Dongwon Enterprise Merger
Vice Chairman Kim Nam-jung Strengthens Governance Structure
Key New Businesses Expected to Gain Momentum

Namjung Kim, Vice Chairman of Dongwon Group. Photo by Dongwon Group

[Asia Economy Reporter Song Seung-yoon] As Dongwon Group completes the merger of Dongwon Enterprises and Dongwon Industries, which has been underway since April this year, and finalizes its corporate governance restructuring, the group’s control under Vice Chairman Kim Nam-jung is expected to be further strengthened.

Dongwon Industries held a board meeting on the 2nd and completed the merger registration through the merger completion reporting general meeting. Since April, Dongwon Group has been promoting the merger of its holding company, Dongwon Enterprises, and its intermediate holding company, Dongwon Industries. On September 14, Dongwon Industries held an extraordinary general meeting of shareholders and approved the merger contract with the existing holding company, Dongwon Enterprises.

After the merger of Dongwon Industries and Dongwon Enterprises, Vice Chairman Kim Nam-jung will become the largest shareholder holding 43.15% of Dongwon Industries, which has become the holding company. This merger represents the most significant change in corporate governance since Dongwon Group transitioned to a holding company system by establishing Dongwon Enterprises in 2001. With this merger, Vice Chairman Kim’s governance structure is effectively completed.

As Vice Chairman Kim takes control of corporate management and governance, new businesses such as the salmon farming business and secondary battery business, which he has been focusing on, are expected to gain further momentum. The profit structure, which has been centered on the food business, is also expected to diversify. In addition to the existing food business, plans are in place to diversify into livestock and health functional foods.

Vice Chairman Kim joined Dongwon Industries in 1996 and worked as a production worker at the tuna can manufacturing plant in Changwon. He also handled sales duties in the Cheongnyangni area of Seoul, making him a rare second-generation owner who has experienced various field operations. It is well-known that he concealed his status as a second-generation owner while working at the factory. Along with this field experience, he has gone through various departments within the group, earning a reputation for his outstanding understanding of the food industry. Since the retirement of Honorary Chairman Kim Jae-chul in 2019, Kim Nam-jung has actively led second-generation management and has spearheaded about ten mergers and acquisitions (M&A). As most of these businesses have now reached a stable phase, there is analysis that he can aggressively expand business again after this merger. Some also view that this success in new businesses could accelerate his appointment as chairman.

Dongwon Group’s corporate governance has been considered somewhat complex until now. However, this merger simplifies the overlapping governance structure, enabling faster decision-making and improving management efficiency. The aim is to allocate resources efficiently and strengthen expertise in each business area. After the merger, the existing holding company Dongwon Enterprises will be absorbed into Dongwon Industries, which will become the holding company of Dongwon Group. All subsidiaries of the existing holding company, including grandchild companies such as Starkist and Dongwon Loex, will be placed under Dongwon Industries as subsidiaries.

Furthermore, by directly controlling affiliates with stable profits such as Dongwon F&B, Dongwon Systems, and Dongwon Construction Industry, the annual operating profit scale is expected to expand from about 260 billion KRW to approximately 510 billion KRW, significantly increasing financial liquidity.

A Dongwon Industries official said, "Through the merger, we plan to enhance management efficiency, strengthen the business competitiveness of each affiliate, and actively promote new businesses to create synergy."