Last year, we underwent hardship due to rapidly changing business environment and fierce global competition. This is a new year, but business environment is likely to get tougher.
Let's look around world economy. In China, growth rate is declining due to excessive investment and real estate market downturn. Even Chinese accept end of the high growth era as a fact and call it ‘shin chang tai’. Considering that China is the biggest trade partner of Korea, I am afraid that this slowdown in growth will affect us significantly.
Also, Japan has entered into economic decline trend again in spite of unprecedented reflationary policies and US, the only country with good economic indexes, has a plan to reduce quantitative easing and raise interest rate. Due to these, we are facing ‘Super Dollar, Super Low Yen’, and as oil price drops abruptly recently, the uncertainty of world economy grows higher and higher.
In the meantime, as consumption desire falters in Korea due to high households’ debt, real estate market downturn and high youth unemployment, 3 lows of low growth, low employment and low income are getting more persistent in the Korean economy.
To overcome these difficulties, Korean government devotes all the power to economic revival using numerous policies such as regulatory reform and investment activation. We should also cooperate eagerly to grow our company and contribute to economic revival.
However, our circumstance would not allow that easily. In the overall recession of world economy, not only we have failed to narrow the quality gap to Japanese companies, but we are now being chased even in price due to low Yen. On the other hand, as the technological gap from Chinese companies is rapidly narrowing, there are only few relative advantages remaining. For a parts and materials company like our own, technological power is the most important competitiveness, however we are being driven to a very tough situation that we have failed to secure core technologies due to lack of activeness and our profitability is declining everyday due to laziness in finding new markets and customers.
To overcome this crisis and keep steady growth, responsible management should definitely be practiced. Abandoning passive attitude of doing just as directed from above, we need such active attitude that each one finds by oneself and performs one's own duty in the self-completion way and finish it to the end without giving up however hard it may be.
In such process, each of us has to communicate actively with each other and, in case of difficulties, open them honestly to make mutual consensus and solve problems together. Let me mention a few things we should definitely perform this year based on practice of responsible management.
First of all, we should make an innovation to the ‘Market Driven Company’ where all management activities are performed from the viewpoint of market and customers. As competition is getting fierce and market environment changes rapidly, it is impossible to expand business and profit with the existing products and services only. We can make continuous growth only by reading market trend correctly and acting in the more customer-oriented manner. Therefore, we have to make more efforts to expand and strengthen marketing network to listen to customers and understand customer's business. And, we have to make detailed analysis of market environment and, based on this, make all management strategies from the viewpoint of market and customers. Also, we have to raise customer value and lead the market by developing and providing better products and services than our competing companies through close collaboration between Sales, R&D and Production Departments.
Also, we have done our best to enhance global competitiveness. Since economic barriers between nations are in the vanishing trend through active pursuit of FTA, we have to lead in competition with global companies by building strategies from global perspectives and practicing these. For this purpose, we have to try hard to produce global top products by constructing optimal global production network and diversifying supply of raw materials to improve cost competitiveness and secure the highest technical power. Furthermore, we have to be active to expand market by developing new customers. To do these well, our working level should be raised to global standard. Hence, I want each person to make more efforts to develop his/her own capacity.
And, discovery and cultivation of new growth engines should also be done. However, in our company, there are a number of new businesses that began a few years ago but have not been normalized until now because the investment was hasty while technologies were unsecured and preliminary preparations were insufficient. For quick normalization of these businesses, I want you to make deadly endeavor to overcome technical barrier and do your best to establish customers' recognition of quality. Also, starting new businesses, we will have to learn the spirit of ‘fight after already winning’ from Admiral Yi Sunshin and make challenges after securing all winning conditions such as close comprehension of business environment and secure of core technologies with winning capability in competition.
Furthermore, let's all combine forces to be the company that practices social responsibilities. Being a first-class company means not only doing business well but also being a respected and social role-model company. Let's try hard together to be a company that cares isolated neighbors and coexists with small businesses to receive love and trust from people. Particularly, in the new year, many environment-related laws will be implemented and safety regulations will be strengthened. Hence, we will have to understand clearly and prepare completely for them.
For such organizations and members that practice these policies well and make outcome, the company will reward them with corresponding prizes and treatments. On the contrary, in such cases as negligence without outcome, company will correct these strictly. Overall, Company will make clear and deserving rewards or punishments. In the new year, I want every executive and staff member to remember this and do the best to definitely achieve the goal.
Dear Hyosung family members, this year is the year of sheep which means fortune and luck both in the East and West. As the saying "Heaven helps those who try hard", fortune and luck will depend on who make more efforts. I sincerely wish that your efforts will make good results in the new year.