[Company analysis] Korea Industrial Co., Ltd. (고려산업)

「Korea Industrial Co., Ltd. (고려산업)」is a company that mainly manufactures and sells assorted feed for livestock, and is also engaged in the meat business to secure a stable sales channel. Although its influence in the industry is relatively weak compared to major companies, they introduced Korea's first full automatic computer process control system, in order to standardize and uniformize product quality. Thanks to this, they are able to produce assorted feed with high efficiency by optimizing formulation of ingredients. The number of connected employees is about 130.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is KRW 10 million, as of 2019

Company name	Korea Industrial Co., Ltd
Company name (Japanese)	高麗産業
Date of establishment	1957
Headquarters location	부산시 사상구 새벽시장로 21
Capital	24,94
Consolidated sales	19,246
Consolidated operating profit	581
Consolidated total assets	20,649
Consolidated capital	11,212
Capital adequacy ratio	54.3%
Consolidated number of employees	130

 

 

 

2. Summary and Features

 
「Korea Construction(고려건설)」that handled construction materials and steel, was established Shin Deokgyun(신덕균), who graduated from Waseda University in Japan in 1957, and had been operating a rice mill since the colonial era. After that, in 1976, the company name was changed to the current「Korea Industries(고려산업)」, and initiated assorted feed business by purchasing plant from「Shinhan jebun(신한제분)」. And in 1977, they founded Busan assorted feed manufacturing factory.

 

In 1986, they opened the second assorted feed factory in Daegu. In addition, they introduced Korea's first full automatic computer process control system, in order to standardize and uniformize product quality. In 1990, this company was listed on Korea Exchange and made a technical tie-up with the Dutch company「HENDRIX」for introducing advanced technology. At present,「Korea Industries」mainly manufactures and sells assorted feed for livestock. And in order to secure a stable sales channel, they are also conducting meat business.

As described above, this company introduced the Korea's first full automatic process control system, to achieve standardization and uniformization of products. And by this, they are able to produce assorted feed with high efficiency by optimizing formulation of ingredients. 「Korea Industries」has laboratories in Busan and Daegu plants, and they are focusing on improving technological competitiveness in high-quality products, farm automation. From 2011, they changed the brand name to "Hafeed (해피드)".

「Korea Industries」mainly imports the raw materials such as corn, wheat and soybean meal from Argentina, Brazil. Then, they produce assorted feed and sell it to domestic farmers. This assorted feed business accounts for over than 90% of total sales. As a result, they rely on imports for their raw materials, so their business performance is easily affected by the situation of international grain prices and exchange rates. In addition, the top 10 companies in the assorted feed industry account for 70% of the total production, so the industry is extremely polarized.

 

 

 

3. Major Business

 

■ Assorted feed business
The combined feed division mainly handles assorted feed for poultry, pigs and cattle, which account for 30%, 25% and 35%, respectively.

■ Meat business
This is a business to secure a stable sales channel for the compound feed business, which is the main business of「Korea Industries」. However, in recent years it has been in the red. And 2018 and 2019 standards, there was no sales record.

 

 

 

4. Financial information

 

※Unit is KRW 10 million

		2017	2018	2019
Consolidated sales		17,452	15,843	19,246
Consolidated operating profit		595	581	581
Consolidated total assets		18,312	21,362	20,649
Consolidated net assets		7,246	9,239	11,212
Breakdown of sales	Assorted feed business	13,754	15,031	18,550
		601	412	576
	Meat business	2,971	0	0
		-4	0	0
	Others	728	812	696
		-3	169	5