Korea Zinc "Focusing on Normalizing Seorin Sangsa Management"... Accelerating Separation from Youngpoong (Comprehensive)

Seorin Sangsa Takes Control of Board... "Quick Recovery of Performance"
Enhancing Synergy to Strengthen Competitiveness of 'Non-Ferrous Metal Trading Company'
Korea Zinc and Young Poong Growing Apart in Partnership Spirit

Korea Zinc has succeeded in securing management rights of Seorin Trading, a group affiliate responsible for exports. Seorin Trading has been managed by the Jang family of Yeongpoong, but Korea Zinc had many complaints about being relatively disadvantaged in exports. It appears that Korea Zinc and Yeongpoong, facing a '75-year partnership' crisis, are one step closer to separation.

At the extraordinary general meeting of shareholders held on the 20th, Seorin Trading approved the appointment of four additional inside directors from Korea Zinc and the reappointment of Honorary Chairman Choi Chang-geun as chairman of the board. Jang Se-hwan, CEO of Seorin Trading, resigned the day before the extraordinary shareholders' meeting. CEO Jang is the second son of Jang Hyeong-jin, an advisor to Yeongpoong Group. Korea Zinc holds 66.7% of Seorin Trading shares, while Yeongpoong holds 33.3%. Korea Zinc's shareholding is large enough to approve special resolutions at the shareholders' meeting.

With the number of Korea Zinc board members increasing from four to eight, the board was reorganized into an 8 to 1 structure. Before CEO Jang Se-hwan’s resignation, CEO Ryu Hae-pyeong also voluntarily stepped down from his inside director position. Filling 90% of the nine-member board with Korea Zinc personnel, Korea Zinc has taken control of Seorin Trading’s management rights.

'Finance' CEO Lee Seung-ho · 'Organization' CEO Baek Soon-heum · 'Overseas Sales' President Kim Jae-seon

Chairman Choi Yoon-beom of Korea Zinc delivering a welcome speech at the groundbreaking ceremony of the nickel smelter held at Korea Zinc in Ulju-gun, Ulsan, on November 15 last year, attended by Prime Minister Han Duck-soo.
[Image source=Yonhap News]

The new inside directors recommended by Korea Zinc are Choi Min-seok, president of Steelcycle and cousin of Korea Zinc Chairman Choi Yoon-beom; Baek Soon-heum, vice president of Korea Zinc; Kim Young-gyu, managing director of Korea Zinc; and Lee Soo-hwan, an executive at Korea Zinc. Kim Jae-seon, an advisor who previously served as CEO of Seorin Trading, will return as an executive. A Korea Zinc official said, "We could not submit the proposal to appoint Advisor Kim as a registered director just before the shareholders' meeting, so the agenda was not addressed at the meeting, but we plan to assign him a management role as an unregistered director," adding, "It will be finalized at the board meeting after the shareholders' meeting."

Korea Zinc plans to use this shareholders' meeting as an opportunity to reorganize the organization and strengthen its overseas sales network to normalize management.

Personnel expert Vice President Baek Soon-heum and sales expert Advisor Kim Jae-seon will be deployed to Seorin Trading’s operations. Vice President Baek will be in charge of organizational restructuring at Seorin Trading. Baek graduated from Yeungnam University with a degree in law and earned a master's degree in labor relations from Korea University Graduate School of Labor Studies. He has long been responsible for personnel and organizational management at Korea Zinc. After serving as a personnel executive at Korea Zinc, he was the head of the Onsan Smelter from 2016 to last year. He currently oversees Korea Zinc’s Talent Management Headquarters, Compliance Management Team, and Internal Accounting Management Team.

Advisor Kim Jae-seon, who will be responsible for normalizing sales, will serve as division president in charge of strengthening the overseas sales network. Kim is a close aide to Honorary Chairman Choi Chang-geun of Korea Zinc. He is an expert in non-ferrous metal overseas sales within Korea Zinc and has worked with Chairman Choi since the early days to develop Seorin Trading. He served as CEO of Seorin Trading from February 2012 to February 2020. Korea Zinc described the new President Kim as "the right person to revive the founding spirit of Seorin Trading along with the 'Korea Zinc DNA.'"

Currently serving as CEO of Seorin Trading, finance expert Vice President Lee Seung-ho of Korea Zinc was reappointed as CEO. Lee serves as the Chief Financial Officer (CFO) at Korea Zinc.

Korea Zinc stated, "Through this reorganization, Seorin Trading has established a management system based on expertise in finance, organization, and overseas sales," adding, "We will stabilize Seorin Trading’s management, quickly recover business performance, and accelerate strengthening competitiveness as a non-ferrous metal export company."

At the board meeting on the same day, Seorin Trading also approved the relocation of its headquarters. The plan is to move the headquarters to the Gran Seoul Building in Jongno-gu, Seoul, together with Korea Zinc. A Korea Zinc official explained, "We will expand collaboration so that Seorin Trading can further strengthen its core capabilities such as exports."

Korea Zinc Cites "Disadvantages in Joint Sales"... Will Yeongpoong Establish a Separate Trading Company?

Choi Yoon-beom, Chairman of Korea Zinc (left), Jang Hyung-jin, Advisor of Youngpoong Group [Photo by each company]

Korea Zinc’s securing of management rights over Seorin Trading stems from its judgment that it was disadvantaged in joint sales with Yeongpoong. Seorin Trading, established in 1984 by Honorary Chairman Choi Chang-geun of Korea Zinc to specialize in the export of non-ferrous metals, is a key affiliate distributing and selling non-ferrous metals overseas for both Yeongpoong and Korea Zinc. It has been responsible for export and sales logistics of various non-ferrous metals produced by Korea Zinc’s Onsan Smelter, its Australian subsidiary Sun Metal, and Yeongpoong’s Seokpo Smelter.

However, Korea Zinc stated this year that "problems arose in joint sales due to Yeongpoong’s business setbacks such as production cuts and operational suspensions." A company official explained, "While Yeongpoong managed Seorin Trading, cooperation and communication with Korea Zinc were not well maintained, and sales support was not smooth," adding, "This decision was made to strengthen overseas sales including exports and to normalize management."

The question is whether Yeongpoong will continue transactions through Seorin Trading, now controlled by Korea Zinc. If Yeongpoong establishes a separate route, the '75-year partnership' will become more distant.

Inside and outside the group, there are expectations that Yeongpoong will establish a separate trading company like Seorin Trading. Analysts say CEO Jang’s resignation is not unrelated to this. It is also known that six Seorin Trading employees recently expressed their intention to resign. The industry views this as a step toward joining Yeongpoong’s trading company. However, Yeongpoong stated, "We are not pursuing the establishment of a trading company."

Seorin Trading recorded consolidated sales of 1.529 trillion KRW and operating profit of 17.5 billion KRW last year. Compared to the previous year, sales decreased by 37% and operating profit by 69%.