Harim to Expand Pan Ocean with Grain
Firm aims to hike Pan Ocean sales to over 10 trln won in 5-6 years.
South Korea's Harim Group aims to grow sales at the country's largest bulk shipper Pan Ocean Co Ltd, which it plans to acquire, seven times to more than 10 trillion won ($8.97 billion) annually within five to six years.
The livestock and animal feed group plans to add a grains trading business to shipper Pan Ocean with the aim of building it into it a major dealer in the sector, Harim chairman, Kim Hong-kuk, told Reuters on Thursday.
"Those who had previously owned Pan Ocean did only shipping, but we will add grain trading," Kim said during an interview in his office in Seongnam, south of Seoul.
"We have done lots of business in livestock sectors requiring grains as raw materials. We know how to do it and we also have a demand base," he said.
The addition of Pan Ocean and a grains trading business would also increase efficiency, because it would make it easier to avoid ships making return voyages with empty holds, Kim said.
The purchase of Pan Ocean - spun off from now-defunct shipbuilding conglomerate STX Group and under court receivership since 2013 - would also help reduce the costs of Harim's poultry, pork and feed businesses, Kim said.
Last December, Harim's Jeil Holdings Co Ltd together with JKL Partners became the preferred bidders for the acquisition of Pan Ocean in a deal worth over 1 trillion won. The deal is due to be completed by the end of May, Kim said.
Kim said he was not worried by the worst slump in history in the global bulk shipping business.
Pan Ocean has been streamlined under court receivership, he said, and now holds 17 years of long-term shipping contracts with only healthy clients, including Brazilian miner Vale and South Korean steelmaker POSCO.
Pan Ocean ships more than 120 million tonnes of dry bulk cargo a year, and its sales stood at 1.5 trillion won last year.
The Harim group, with 11,000 employees and 5.1 trillion won of combined sales last year, has four listed companies: poultry meat producer Harim Co Ltd, Harim Holdings Co Ltd , and pork and feed producers Sunjin Co Ltd and Farmsco.
Harim also has a poultry processing plant in the United States, and feed plants in China, Indonesia, the Philippines, Vietnam and Myanmar.
By Choonsik Yoo and Meeyoung Cho