Building a company from a simple idea

[The faces inside KOREA’S CONGLOMERATES:94] The firm’s industrial paints have colored many buildings

Often some of the world’s greatest inventions start with the simplest idea. That was the case for Noroo Group, a major chemical conglomerate. 

During the period of Japanese colonial rule (1910-1945), Koreans were stripped of their own language and alphabet - crucial elements of national identity.

When the country regained independence in 1945, Korea lacked the paper and ink needed to spread its language again.

Han Chung-dae (1920-1998), a native of Hamheung, South Hamgyeong Province in North Korea, and a graduate of the Osaka Institute of Technology, started an ink business in 1945 to supply publishers.

“The motive was naive. We were created under a sense of responsibility, ‘rebuilding our country,’” the company said.

Such intentions are reflected in the company’s name.

Noroo means deer in Korean, after Han saw a pair of deer while on a trip to Europe. He said he wanted his company to be like a deer, which causes no harm to others and lives in peace.

In 1957, the company registered the Noroo brand, which many Koreans associate with a can of paint that features a big-eyed deer. 

In 1963, the company built its headquarters in Euljiro, central Seoul, which has become a major area for publishers, paint and other construction materials.

In 1968, the company’s paint was the first to be awarded a KS mark by the government, which denotes a product made with the highest industry standards.

In 1973, Noroo was listed on the stock exchange and in 1980 Han became chairman.

In 1991, the company became the first local paint manufacturer to have more than 100 billion won ($90.1 million) in sales.

Noroo Group has since grown into a major conglomerate with 12 affiliates that make ink, paint, resin and plastic. Noroo Paint is the group’s flagship company that manufactures some 10,000 paint products for buildings, consumer electronics and automobiles. It ranks second in this sector after KCC.

The group’s other subsidiaries include IPK that makes paints for vessels and industrial purposes; Noroo Chemicals that produces specialized paint; and Seda, a producer of printing ink, resins and chemical products.

Celebrating its 65th anniversary, the group expects around one trillion won in sales this year. 

The group’s sales rose to 928 billion won last year from 713 billion in 2007. 

The group has a target of achieving two trillion won in sales by 2015 by boosting research and development and expanding overseas.

Early this year, Noroo Group restructured its R&D facilities by setting up an R&D center for the group and another seven R&D operations linked to different affiliates. 

The R&D center will focus on the long-term development of new business areas, while the R&D affiliates are devoted to product development.

Noroo will spend around 20 billion won in R&D investment this year, up from 17.5 billion won last year.

One focus of its R&D efforts concerns the environment.

The company recently introduced a paint used for buildings that is expected to last 20 years, tripling the lifespan of the paint that is normally used.

It also introduced eco-friendly and child-friendly paint that reduces the content of such harmful ingredients as formaldehyde.

Also under development is paint containing hydrophile properties, which means that it becomes clean when it comes in contact with water.

The product, which eliminates the need for cleaning detergents, will likely be commercialized in three years’ time.

Another growing sector is that related to paints for mobile phones. Noroo supplies paint to major mobile phone makers like Nokia and Research in Motion.

It aims to increase its sales in this sector from 5 billion won to the 20 billion won level in the near future.

“We believe this segment will expand rapidly in coming years,” a Noroo official said.

The expansion of its international business is also important.

The local paint industry is valued at around 2.7 trillion won, while the global paint industry is worth around 50 trillion won.

Choi Gwang-kyun, the group’s vice president, has said the group wants to get 50 percent of its total sales from overseas business by 2015, up from its current ratio of approximately 20 percent.

The group has been expanding its presence overseas through mergers and acquisitions in several foreign markets, including China, Southeast Asia and the Middle East. 

The group has had its eye on China since the 1990s.

“It’s important to succeed in the Chinese market to become a global company,” Choi has said. 

The company has supplied paint to some major construction and building projects, including the restoration of the Forbidden City in 1995 and again in 2005.

The man in charge of Noroo Group today is Han Young-jae, 55. The eldest son of the group’s founder, he holds a bachelor’s degree in business from Yonsei University and an MBA from Boston University. He joined the group in 1980.

Choi Gwang-kyun, the group’s vice president, joined the group in 1982 and has a bachelor’s degree in business from Korea University.

At the helm of Noroo Paint is Ahn Kyung-soo, who was appointed chairman in July.

He previously worked as an executive at major Korean conglomerates, including Daewoo and Samsung, as well as Japanese electronics giants Sony and Fujitsu.

Kim Soo-kyung is the company’s CEO and president. Kim is a university alumni with Han, having obtained his MBA from Boston University.

He joined the group the same year as Choi.
source:Joongang Daily