Diversified South Korean business conglomerate Samsung Group is looking to restructure its operations in a bid to lessen its reliance on subsidiary Samsung Electronics.
According to reports in the Korean press, the conglomerate is increasingly concerned the consumer electronics business accounted for roughly three-quarters of the group’s revenues and profits for 2013.
As competition intensifies in the tech sector, senior executives are reportedly increasingly concerned about over reliance on the electronics business.
The moves include a merger between Samsung General Chemicals and Samsung Petrochemical, while Samsung SDI will take over textile producer, chemical manufacturer and fashion label Cheil Industries.
Late last year, Cheil was moved under the control of a holding company called Samsung Everland, which operates the company’s amusement parks, as part of a deal that, in turn, saw the theme park operator spin-off its food division.
“Without ‘another Samsung Electronics’, the group may lose competitiveness sometime later. Our chairman ordered top management at Samsung affiliates to develop business models to ensure profit sustainability,” a Samsung executive is quoted as saying.
However, some analysts believe continuing the Lee family dynasty is also a key motivating factor behind the moves.
“Samsung vice chairman Jay-yong Lee will handle electronics, and finance affiliates, while the chairman’s oldest daughter Boo-jin Lee and youngest Seo-hyun Lee will take over the group’s hotel, heavy industries and fashion and media businesses, respectively,” said Sang-hun Lee, an analyst at Hi Investment told The Korea Times.
As SmartCompany reported, Seo-Hyun Lee, the daughter of Samsung chairman Kun-Hee Lee and granddaughter of founder Byung-Chull Lee, was promoted to president of the consolidated Samsung Everland division in December, following its takeover of Cheil.