Hanjin Heavy Industries & Constructio

http://www.hhic-holdings.com/english/

HHIC Group has maintained stable growth in shipbuilding, construction, engineering, energy, and leisure businesses. However, it’s essential to adopt an advanced corporate governance structure to evolve into a world-class company that properly responds to changes in the business environment and makes sustainable growth possible.

In particular, an independent and transparent responsible management system has been required for mid and long-term development and internal growth. Therefore, we decided to adopt a new management system for innovation and advancement this year in celebration of our 70th anniversary. As the group was split on August 1 after an extraordinary shareholders’ meeting on June 29, 2007, HHIC Holdings and HHIC were listed on the stock exchanges separately on August 31.

Under a holding company structure, HHIC Holdings will take care of investment only while HHIC, Korea Engineering Consultants Corporation, Hanjin City Gas, Hanil Leisure will be operated as affiliates of the holding company. Each affiliate will only focus on improving its core competency and independent corporate value. As an efficient global management system, the holding company structure may present the following expected effects:

As the holding company focuses on investment and each affiliate concentrates on core business through optimized strategy and efficient allocation of management resources, management efficiency and flexibility will improve. As the group is split into an investment company and an operating entity, business risk including new business risk will be reduced. Because one affiliate’s problem (ex: insolvency) now has little impact on other affiliates, risk management capabilities can be greatly improved. In addition, due to higher management transparency and expansion of independent management under an advanced corporate governance structure, the stable corporate governance structure will stabilize.

The holding company system has been adopted to survive in a fierce global competition. Many renowned global businesses have already adopted the system in order to survive and get transparency in corporate governance. This year, in particular, many companies have adopted the holding company system.

According to last year’s announcement by the Fair Trade Commission, HHIC Group reached 92.49% in terms of IPO. Based on transparency management, we will keep moving forward in order to make a big leap into the future and begin a new age with all our clients.