|Hanwha-developed solar panels installed in the heart of Frankfurt, Germany / Courtesy of Hanwha Solutions|
This is the last in a three-part series of stories analyzing Hanwha Group's positioning status and why pursuing better brand positioning matters in terms of the group's future sustainability. ― ED
By Kim Hyun-bin
It will become imperative for Kim Dong-kwan, vice president of Hanwha Solutions, to improve internal communication in order to successfully conduct a corporate restructuring, shifting the corporation's profitability focus from its legacy businesses to the rising renewable energy sector, as the market is expected to rapidly evolve in the medium to long term.
Sources told The Korea Times Monday that Hanwha is currently brainstorming ways to shift the business focus to the renewable energy sector especially in the lucrative solar business to better lead and adapt to the ever-changing global market.
In the past, Hanwha has relied heavily on legacy businesses with a solid footing in chemical-, life insurance-, and defense-related businesses. Over the last few decades, the group has been embracing these legacy and conventional businesses as the group's growth drivers.
|Hanwha Solutions VP Kim Dong-kwan|
"Internally, there has been some opposition to the move over the timing of the measures, especially among employees within the conglomerate's main legacy businesses," a source requesting anonymity said.
In order for the conglomerate to take extreme corporate structural reform measures, internal communication will become key in order to swiftly and accurately relay the vice president's vision for future corporate growth to employees as well as explanations and reducing uncertainties surrounding the reshuffle of personnel that will occur from the changes.
"Internal communication becomes crucial when trying to shift the business focus to a fairly new industry while trying to reduce reliance on existing profitability structures," an industry official said. "It is up to Kim Dong-kwan on how well he portrays his vision to employees and explains how the changes will benefit them and the company in the long run."
Kim has been leading efforts to invest in solar energy and hydrogen, which industry watchers believe will become key pillars of the conglomerate.
His leadership capabilities were well-proven through nearly a decade of bold investments in the solar industry and well-praised for his relatively recent decision to invest in the hydrogen energy market.
Hanwha heavily invested in Nikola Motors, which has been dubbed the next Tesla, through which the company entered the hydrogen vehicle and infrastructure market. Earlier this month, Nikola was listed on the NASDAQ. In 2018, Hanwha invested $100 million in Nikola taking up 6.13 percent of the company. Just 18 months later the investment value rose to $750 million.
The vice president seems to be the mastermind behind Hanwha's swift decision to invest in the hydrogen market backed by strong profitability from the solar business, which is expected to become a major fuel source in the future.
Kim served as the link between Hanwha and Nikola in 2018, when Nikola was just a venture startup company.
"Reliance on fossil energy is predicted to be on the decline. Hanwha Group plans to secure continuous growth through hydrogen, solar and other renewable energy sources. Currently, we are trying maximize our capabilities to enter the hydrogen ecosystem market," Hanwha official said.
Many industry watchers believe, as solar and hydrogen projects continue to show significant growth, the conglomerate will inevitably conduct structural reform to focus more on the sector.
The expected corporate transformation is likely to increase Kim's grip over the conglomerate to better solidify the management succession from his father Hanwha Chairman Kim Seung-youn.
In March, Kim set himself up as the successor of Hanwha Group, being appointed to the group's cash-cow affiliate Hanwha Solutions, which many industry experts analyzed as being the initial stage of managerial succession.
The vice president's influence over Hanwha Solutions has expanded greatly over the years after entering group management in 2010. His angle and insights in the solar industry have led the company to become one of the leaders in the global market.