Wins international accolades for project financing services Samsung Corp. has been actively pushing ahead with project organizing service projects abroad by making the best use of its global networks and financial power, a top manager of Samsung Corp. said. "By maximizing the use of our global networks connecting 42 countries through 76 overseas offshoots, we are making a strong push for project organizing service projects in foreign countries," Chung Woo-taik, CEO of the Trading Division of Samsung Corp., said. Samsung Corp. now engages in trade with about 10,000 foreign companies for exports of chemical, steel, IT products and other commodities. In an interview with The Korea IT Times, Chung said that Samsung Corp. started the project organizing service project in Ghana in 1990 for the first time. In 1990, Samsung received a $12 million order from the government of Ghana for construction of storage of oil products. Under the judgment that the success of the project organizing service project largely depends on their finance mobilization ability, Chung has made strenuous efforts to enhance the company's ability. Thanks to his redoubled efforts, the Busan New Port Project for which Samsung led finance mobilization was selected as the "Year's Best Project Financing" by the British project financing magazine, "Project Finance International" at the end of last year. In 2005, Samsung Corp., along with SK Construction, won a $200 million plant order for an oil-refining factory in Yemen through a project financing method, proving its top-level finance ability again. "With the success of winning the largescale project, Samsung Corp. is expected to actively participate in oil-related projects in the Middle East," said Chung. Samsung Corp. is also expanding its plant-oriented overseas project businesses to the IT sector. "Based on Korea's top-level IT technology, we are actively exploring project export markets in the IT field," said the top manager of the trading company. Samsung Corp. received a $120 million order from Indonesia for the CDMA project in June 2003 and $100 million order from the Philippines for the registration computerization project in October 2003. "Recently, we are seeking IT projectrelated orders in East European regions with domestic communication companies. At the same time, we are expanding our business arena to China and Russia," he said. For instance, Samsung Corp. signed a memorandum of understanding (MOU) with e-Moscow JSC (joint stock company) in September last year for joint cooperation in the Moscow City's egovernment project. Related to this, Seoul City and Moscow City jointly designated Samsung Corp. and e-Moscow JSC as official windows in November last year for the process of egovernment. Accordingly, Samsung Corp. made a proposal for total solution covering technology power of Korean SI companies, the experience of Seoul City, and competitive finance mobilization to Moscow City in a bid to win many of the $2 billion e-Moscow programs, and now engages in individual projects. For example, Samsung Corp. is conducting a feasibility study for $100 million Muscovite Single Card project, whereas Moscow City is considering the $100 million City Security project at the proposal of Samsung. Samsung is also going all-out to expand the overseas resource development project. In 2004, Samsung enjoyed $18 million in dividend returns from its investment in an oil-field in Algeria and the LNG projects in Oman and Qatar. It is also expected to enjoy bigger dividend returns from the overseas resource development projects, thanks to high oil prices. It also participated in an oil-exploring project in the west block of Mahuangshan in China with an equity share of 30.8 percent, so it is expected to launch a commercial production in the latter half of this year. In April this year, Samsung Corp. concluded a contract with Yemen's government to participate in the oil exploration project in the 70 block in Yemen with an equity share of 18.05 percent. "In the future, we also plan to actively seek overseas resources development projects, especially in the Middle East, China and Kazakhstan," said Chung. Besides, Samsung Corp. is expanding its overseas businesses by employing a variety of methods, including entrustment operation project, equity participation and business marketing supports. Of these projects, the most representative one is Samsung's entrustment operation project of Otelinox, a stainless processing plant in Romania. As part of its business diversification efforts, Samsung Corp. purchased 51% of Otelinox equities for $37 million in 1997 when the privatization of state-run companies was active in Romania riding on the wave of liberalization. Thanks to Samsung's strenuous efforts to normalize management, the profits of Otelinox soared from $500,000 in 1997 to $4 million in 1999. Boosted by such a great success, Otelinox was selected as the most profitable enterprise in 2000 by the Chamber of Commerce and Industry in Romania, winning the best prize for management. Otelinox dedicated a precision mill with an annual production capacity of 15,000 tons in 2003 and it now produces highluster extremely thin plates with high value added, securing a stable profit structure. "Based on its confidence gained through the successful managerial results of Otelinox in Romania, Samsung Corp. plans to expand its infrastructure-related investment projects abroad, including communication, e-government, water supply, and medical service projects," said Chung. [INTERVIEW] Recently, it has lowered the portion of simple exports to its entire business, while exerting best efforts to enhance value added through diversification of business functions. Please comment on Samsung Corp.'s strategy to secure overseas bases In keeping with the globalization era, Samsung Corp. is exerting best efforts to secure firm strongholds in foreign countries, especially in China, Russia and India. Samsung Corp. opened its office in Beijing, China in 1985 for the first time. What is your business strategy aimed at the Chinese market Samsung Corp. aims at making China the No. 1 profit source among the company's overseas business projects by 2007. Following the opening of the Beijing office in 1985, we established trade corporations in Hong Kong, Beijing, Shanghai, Gwangju, Qingdao and Dalian. We are going all-out to seek high profits from the trading business with China by securing sales networks and professional manpower. Russia is a country with affluent natural resources. Do you have any intention to expand your company's business in the country We already set up a branch in Moscow in 1989, and now operate two more branches in Russia. At present, we export Korean-made batteries, films, CDs and synthetic fiber products to Russia. At the same time, we source nonferrous metals, including heavy oil and aluminum, from Russia to South Korea or a third country. In the future, we plan to expand the sourcing business of chemical and natural resources through function composition and bolster the sales business of Korean-made IT products in Russia through construction of effective distribution networks. Through systematic network management, we are planning to explore new businesses in Russia, Siberia, Far East and neighboring CIS regions. Do you have any plan to expand your business in India Samsung Corp. operates branches in Mumbai and New Delhi in India. The main growth industries in India are information technology (IT) and biotechnology (BT). And India has showed a high annual economic growth of 7~8 percent and it implemented a 10 percent cut in tariffs, showing its government's will to continue deregulating the market. In keeping with the Indian government's deregulation policy, we will make best efforts to escape from the existing simple trading business structure centering on IT, steel, chemical, metal and textile products, while pursuing local businesses using the function of our branches there. In Brazil, which boasts of rich natural resources such as oil, iron ore, coffee and orange, we plan to focus our business on the raw material sourcing business for sales to South Korea and a third country, away from the export business in the future. At the same time, we will push for offering multi-services, including finance and logistics, in Brazil in the future.