The Magician’s Memorial - Chapter 62



Only Krnovel

Episode 62. black knight (4)

Establishment of a joint oil refinery company with Aramco.

I threw a huge bait, and my grandfather watched the bait as he gently touched it.

“Are you trying to dominate the Korean oil refining market by creating a mega oil refining company that combines Taewoo Chemical and Taewoo Heavy Industries?”

“Aramco promised to supply us with crude oil at a stable price. Chairman, don’t you know this well? Oil companies are enjoying high sales and operating profits. “We must enter the oil refining industry even now.”

Vehicle sales were increasing every year.

As the number of vehicles increases, oil companies need to refuel, so oil companies’ profits also increase.

“Taewoo Chemical and Taewoo Heavy Industries have very different fields. “In particular, Taewoo Heavy Industries is also involved in the shipbuilding business.”

“So, I would like to tell you one plan. Creating a joint venture requires a lot of capital. And we also need Taewoo Heavy Industries’ technological capabilities. But you don’t need shipbuilding skills.”

“Are you saying we want to separate the shipbuilding business from heavy industry?”

“How about selling the shipbuilding business separated from Taewoo Heavy Industries to Ackman through negotiations?”

Plan B.

The best way would be to sell Taewoo Heavy Industries as a whole.

My grandfather was never the kind of person who would just let things get taken away from him, so it was best to take the shipbuilding business away from him.

Taewoo Heavy Industries’ shipbuilding business accounts for more than 50%.

It was clear that the debt ratio could be lowered dramatically, and it was also the only way to change my grandfather’s mind.

“Let’s separate the shipbuilding business and hand it over. Let’s do oil refining business instead. Hmm, what does the Chief Secretary think?”

“It is a better choice than losing the entire Taewoo Heavy Industries, but Taewoo Shipbuilding & Marine Engineering is a company with very outstanding technology.”

“Taewoo Shipbuilding & Marine Engineering’s operating profit margin is at best 5%. During a recession, negative operating profit margins may occur. But oil companies take a base operating profit margin of 10%.”

To persuade, I presented detailed data.

I explained the growth potential and operating profit margin of the oil refining business to my grandfather and Director Kim.

“It’s operating profit margin again.”

“It’s a business that fits perfectly with my grandfather’s emphasis on being too big to fail. The oil refining business is much larger than the shipbuilding business. We could build at least thousands of gas stations across the country. “There will be more people working there than in the shipbuilding business.”

“It’s an oil refining business. “It’s not like I haven’t been interested in it for a long time.”

“Why is oil called black gold? Because it makes money, it is called black gold. “Everyone else is doing business with gold, so shouldn’t we start doing it too?”

My grandfather valued manufacturing.

It was also a characteristic of the first generation of chaebols, and it was also the manufacturing industry that created the current group.

“Do you know how much effort and hardship Taewoo Shipbuilding has put in to acquire its current technological capabilities?”

“So we can sell it more expensively. And you cannot grow a company through manufacturing alone. South Korea is growing at an alarming rate. “Just as Japan is moving further away from manufacturing, the day will soon come when our country will do the same.”

“That day will come someday, but I don’t think it will come within the next 10 years.”

“I am looking 10 years into the future. “When I think about that time, I think the oil refining industry has a higher growth potential than the shipbuilding industry.”

My grandfather looked at the nameplate for a moment.

‘Chairman Kim Tae-jung.’

The grandfather seemed to be thinking about the time 10 years later when his grandson’s name would be engraved on that nameplate instead of his own.

“Yes, in 10 years you will be sitting here. So your thoughts are important too. But no matter how much I think about it, I don’t want to hand over Taewoo Joseon.”

“You can’t have an oil refining business and a shipbuilding business at the same time. “It’s an opportunity to give one and get five.”

“Do you think oil refining will be more than five times bigger than Joseon?”

“I can assure you. “If we can establish a joint venture with Aramco, it will be at least five times more.”

It’s difficult to get permission just verbally.

So I took out a contract. It was a contract with the seal of the Saudi royal family.

“I also don’t believe in promises that are just words. “I even received a contract just in case.”

“Even a contract? Hmm, it’s a lie to say that I went to Saudi Arabia to see a friend. “Did you go to Saudi Arabia for the oil refining business in the first place?”

“It is true that I am interested in the oil refining business, but I had no intention of starting an oil refining company right away.”

“Did you intend to start when you sat down here?”

“… … That’s right. I thought there was a time for everything. But the time came sooner than I thought.”

Grandfather quietly closed his eyes and was lost in thought.

Only after being lost in thought for over 20 minutes did I look at the manager.

“Why don’t you move the secretariat, planning office, and Taewoo Securities to evaluate the feasibility of the business? “Time is running out, so we need to get results as quickly as possible.”

“I’ll start right away.”

“And you go to Saudi Arabia right now. “I need to see if Aramco is sincere in its intention to create a joint venture.”

“We will order a business feasibility study and depart for Saudi Arabia immediately.”

My grandfather just believed what I said and didn’t move.

He was a person who had to beat on the stone bridge over and over again to get rid of his anger.

* * *

Four days later, the manager returned to Korea from Saudi Arabia.

At the same time, my grandfather called a meeting of CEOs and brought up the topic of the oil refining business.

“Aramco proposed forming a joint venture with us to do oil refining business. As everyone knows, SS Oil is already a joint venture with Aramco. “But it seems like he doesn’t like the current scale.”

“But since SS Oil exists, would you want to create another joint venture in Korea?”

“If we take over SS Oil, those problems will disappear. “We are planning to create a mega oil refinery by combining half of Taewoo Chemical and Taewo Heavy Industries. What do you think?”

There were several bosses who already knew this information.

In particular, Park Man-deok, the president of Taewoo Securities, knew the entire situation well as he had been by his grandfather’s side from the beginning and provided advice and information.

“I agree. Establishing a joint venture with Aramco will enable a stable supply of crude oil. “It is a business that will never fail, and it will certainly serve as a stepping stone for Taewo Group to become the best group in Korea.”

Taewoo Securities CEO Park Man-deok’s words had weight.

Because he was the person who moved information and funds, the presidents did not oppose anything President Park Man-deok said.

But not everyone agreed.

Only Oh Kang-cheol, CEO of Taewoo Heavy Industries, who was involved in this incident, strongly opposed it.

“Creating a joint oil refinery company is a matter of later. The hyenas of Wall Street are biting heavy industry. “It is right to deal with the hyenas first and then talk about establishing an oil company.”

“I’m saying this because the joint venture is related to this acquisition.”

“How is that related?”

“A lot of money is needed for a joint venture with an oil company. So, why don’t we sell Taewoo Heavy Industries’ shipbuilding division to the Ackman guys?”

The CEO of Taewoo Securities nodded.

Oh Kang-cheol, the president of Heavy Industries, tilted his head and raised his voice as if he was yelling while assessing the situation.

“Are you saying we should hand over Joseon now? Taewo’s shipbuilding technology is recognized around the world. “How are you going to sell it?”

“Heavy industry is embracing oil refining instead of shipbuilding. The size of heavy industry will be more than five times larger than it is now. Would you still be against it? “I am thinking of you as the president of the joint venture we will create in the future.”

“But Joseon will never be allowed. “The shipbuilding industry is the root of heavy industry.”

President Oh Kang-cheol was a person with a strong attachment to the shipbuilding industry.

He was also the person who put the most effort into helping Taewoo Joseon achieve its current level of technology.

“Why don’t I know how you feel? I also want to protect Taewoo Heavy Industries and shipbuilding. But things got difficult. “If we continue to suffer like this, we will have to hand over the entire heavy industry.”

“I agree with what the Chairman said. Isn’t a crisis an opportunity? It would never be a loss if we could separate the shipbuilding industry and start the oil refining business in earnest. Taewoo Group will gain a huge cash cow.”

“President Park Man-deok! Do you see business only in numbers? “The value of the shipbuilding industry can never be calculated by playing with numbers!”

President Oh Kang-cheol was a man of great tenacity.

But is it really because of perseverance?

He looked like a sturdy man, but there was a sly snake hiding inside him.

I knew better than anyone else why President Oh Kang-cheol opposed it so strongly.

He was a person included in the killing squad I created in my past life, and was involved in the Taewoo Heavy Industries embezzlement case.

“I agree with President Park Man-deok’s opinion. And if President Oh Kang-cheol loves the shipbuilding industry so much, wouldn’t it be okay for him to become president of Taewoo Shipbuilding, which will be spun off from Heavy Industries?”

“President Kim Min-jae! What does that mean now! Are you telling me to leave Taewoo Group?”

“Whether to choose between Taewoo Group and the shipbuilding business is entirely up to President Oh Kang-cheol.”

I spoke in a cold tone.

And I knew very well what he would choose.

He will probably choose to become the president of Taewoo Shipbuilding.

Choosing Taewoo Shipbuilding over the CEO of Taewoo Energy, which would become a huge affiliate, was not because he loved the shipbuilding industry.

This was because the straw he planted was Taewoo Joseon.

There were a large number of subcontractors near the shipyard, and the person who managed them was President Oh Kang-cheol.

His brother was probably the owner of a subcontracting company, right?

Did you say that your younger brother runs a human resources shop and your cousin runs a welding business?

It was CEO Oh Kang-cheol who stuck not one but dozens of straws in the shipbuilding industry.

You can’t have someone like that in Taewoo Group. While selling Taewo Shipbuilding, let’s hand over President Oh Kang-cheol and his straw.

“Hmm, I will support whatever President Oh Kang-cheol chooses. Then, I will assume that everyone agrees and proceed with the negotiation process for the sale of Taewoo Shipbuilding. “Taewoo Securities will discuss with Ackman Fund and bring good results.”

“Thank you for entrusting us with it. “I will get even a penny more.”

“With that in mind, this presidents’ meeting will end. It’s a difficult situation, but please give everyone your strength. When this crisis is over, our Taewoo Group can move to greater heights!”

at las!

It was possible to dispose of an affiliate that was full of debt.

Although Taewoo Heavy Industries could not be sold, the debt held by Taewo Shipbuilding was enormous.

We were able to separate it from Taewoo Group.

If only the debt could be passed on to Hyunjae Group.

You can see two huge benefits at once.