Dear Doosan family members, A radiant New Year, 2012, the Year of the Dragon, is here. I would like to first express my sincere gratitude for the devoted efforts you made for the solid growth of our company despite the difficult domestic and international environment.
Before starting the New Year, let’s look back on the last year. The world economy, once again, faced formidable obstacles to its recovery from the latest global financial crisis. The European fiscal crisis and related negative effects on the economy spread to the rest of the world, and we feel its aftermath still today.
Doosan won contracts worth 13.9 trillion won (US$ 12.6 billion), achieved sales of 26.2 trillion won (US$ 23.8 billion), and its EBIT reached 1.7 trillion won (US$ 1.5 billion), last year. These figures represent fairly good performance considering the global economic conditions which were worse than originally expected.
Doosan made considerable achievements, last year, thanks to earnest efforts to increase value in each sector. We enhanced the foundation for qualitative growth, and made meaningful progress in creating a system to develop new growth engines. We expanded our production bases to target new markets, and improved the competitiveness of our products and technologies through continuous investment.
Doosan Infracore established a full line-up of production systems to engage the Chinese market by completing an excavator factory in Suzhou, China. The company also started to build an excavator plant in Brazil as an effort to find new customers in the South American market. Doosan Heavy Industries & Construction signed a contract for the construction of Korea’s first IGCC demonstration plant, expanding Doosan’s influence in the new renewable energy sector.
Furthermore, Doosan’s effort to attract new talents resulted in welcoming 3,000 hires - the largest number of new family members in Doosan’s history.
I am confident that such efforts to strengthen the foundation for future growth and to build capabilities will lead to new opportunities. Even though the current fiscal troubles in Europe could stretch out for some time, one could also regard it as a period to prepare for new growth. The US market has already begun to show signs of recovery, though slow, thanks to an increase of replacement demand. Emerging markets such as China will still be major factors and should create opportunities for the world economy.
Under such global market conditions, this year will be the year to elect new leaders for almost 30 countries across the world, including some of the world’s most advanced economies. Thus, we should pay close attention to the political and economic conditions and formulate strategies carefully.
Dealing with various changes in the business environment for over a century, Doosan was able to equip itself with experience and to foresee the future one step ahead of others. Over the past decade, Doosan successfully achieved big changes, with strong passion and ‘spirit’. Equipped with such experience and passion, I am confident that Doosan will be able to overcome any challenges the future might hold.
With that confidence, Doosan set a 2012 business plan to achieve 29.1 trillion won (US$ 27.4 billion) of sales and 2.2 trillion won (US$ 2.0 billion) of EBIT. This represents a year-to-year increase of 11% in sales and 29% in EBIT. Given our strong capabilities, these targets should be able to be achieved.
However, there is something equally important as achieving our business targets. We should be mindful that only the well–prepared can stay ahead of their competitors. Therefore, the more difficult the challenges, the more important are efforts to strengthen fundamental capabilities and to secure the requirements for sustainable future growth.
It is in this context, I would like to stress a few priorities on which we need to focus this year.
Our top priority should be improvement of technology and product competitiveness. If Doosan is to grow into a global leading player, regardless of external conditions, achieving the world’s top level in technologies and products is a must. To achieve this, I urge all our employees to pay attention to the root causes. Please assess the gaps between Doosan and the world’s top-tier players in terms of technology and products, and if there are any, analyze the root causes and ensure all efforts are made to fill such gaps.
We should secure technologies if we lack them, or change the systems if they are the cause of the problem. We should find capable workers if the cause is in our human resources. Simply upgrading current levels must not be the solutions.
Growing into a world’s top business enterprise requires us to be the world’s top level in organizational culture, as well. Our corporate culture should be one that supports the creativity of individuals and that does not consume unnecessary time or energy. I believe that an efficient use of horizontal and vertical communication in the workplace will be a shortcut leading to the corporate organization we desire, one based on Inhwa – fairness, harmony and respect. In depth analysis of fundamental limitations and properly designed improvement programs should also be applied in building the ideal organizational culture. We should move quickly and boldly to remove any unproductive cultural elements in our organization.
We should also pay close attention to our social responsibilities. Doosan will continue to strengthen social contribution activities focused on providing support for “the growth and self dependency of talents”. We will also enhance the system of mutual growth programs, helping our partners and contractors achieve global competitiveness. I hope each one of you, in any way that you can, do your best in such activities so that Doosan can be more trusted and respected.
Dear Doosan family,
The speed and the depth of changes in the world are getting more difficult to predict. However, a tree with deep roots can withstand any wind of change. I hope that you will use the year 2012 to strengthen the basics and enhance capabilities. Doosan will fully support you. Let us work together to build a virtuous cycle where your efforts to strengthen your capabilities enhances the company and, in turn, a stronger company contributes to your personal growth.
I wish all your hopes and dreams come true during this New Year, and I wish you and your family peace, health and happiness throughout this year.
January 1, 2012
Chairman of Doosan