Yungjin Pharm first entered the pharmaceutical industry in 1952 under the name Yungjin and is celebrating its 70th anniversary this year. The company manufactures and exports pharmaceuticals to the Japanese and Southeast Asian markets based on its domestic business of prescription and generic drugs. Last year, Yungjin’s sales increased by 11.4% year-on-year, driven by steady growth in the domestic sales and consignment business and the recovery of exports of cephalosporin antibiotics products and raw materials, which are key items in the global business. CEO Mr. Lee Ki-Soo said, "Despite the difficult conditions, we achieved sales growth and improved operating losses last year thanks to the efforts of all employees who did not give up and did their very best. We will continue these trends and focus on reaching profitability within my term." He had previously worked at Yungjin Pharm for six years. He returned to the company as CEO. On February 10, we met Mr. Lee and asked him about the company's main business direction this year and the recent trend of ESG management.
![[Photo courtesy of Yungjin Pharm]](/news/photo/202302/135243_122788_5216.jpg)
- This is your second year as CEO. We are wondering what the company’s main business goals are.
“We will focus on achieving surplus management through improvement in profitability. The domestic business division will focus on expanding the proportion of our own products and growing the business centered on chronic diseases, while the overseas business division will secure mid- to long-term growth engines by realizing entry into new export businesses based on increased sales from existing customers. The R&D division will strictly adhere to the launch schedule of new products under development and systematically establish and focus on short-, medium-, and long-term development plans to discover new products for chronic disease groups. The production division aims to achieve competitiveness as a global production base on the basis of high-quality capabilities and production efficiency through excellent GMP facilities.”
- How was the business performance during your first year as CEO.
“Despite considerably challenging internal and external environmental factors, sales increased by 11.4% year-on-year in 2022, through steady growth in domestic sales and consignment business, and recovery in exports of cephalosporin antibiotics products and raw materials, which are the main items of the global business. Thanks to the efforts of all our employees, our operating losses have been halved compared with the previous year. I can tell you the biggest achievement is that our employees have become more passionate and motivated to do their best.”
- The biggest challenge seems to be returning to operating profitability.
“The entire staff did not give up despite the difficult conditions and made their very best efforts to achieve revenue growth and improvement in operating losses last year. We will continue these trends and focus on achieving a turnaround within my term.”
- You are known as an expert in overseas marketing, having served as the head of the global business unit at major pharmaceutical companies. We are wondering what the direction of overseas business will be.
“Overseas pharmaceutical business is expected to become increasingly competitive. In the market for raw materials and finished pharmaceutical products, you cannot survive unless you have competitiveness in price and quality. Therefore, we will focus on expanding sales and stabilizing profitability of existing export businesses by securing global-level GMP quality control and cost competitiveness, and laying the foundation for overseas business growth by realizing the commercialization of new businesses. Furthermore, based on the experience and knowhow accumulated over the years in the domestic generic drug business, we also plan to become a global general trading company through business diversification such as expanding the export of generic drugs and health functional foods in addition to prescription drugs in overseas business.”
- You have worked for Yungjin Pharm for 6 years before and returned to the company as CEO. This must feel special.
“That's right. When I came back after five years, there have been many changes. First and foremost, it was heartbreaking to see that Yungjin had become a loss-making company in terms of business. Through a thorough cause analysis, we have seen the reality and are calling for vigorous efforts. Yungjin Pharm celebrated its 70th anniversary. It is a pharmaceutical company with potential and tradition, having made a name for itself as one of top pharmaceutical companies in the 1990s. Yungjin Pharm has been through many ups and downs, but it is still going strong today. If we look straight at the reality with this kind of poential and persistence and overcome the crisis of deficit through excruciating efforts, we will surely be able to reproduce the past glory of Yungjin, and I am determined to give my soul for this.”
- The company seems to be focusing on ethical management while passing the follow-up audit on the certification of the anti-bribery management system.
“After being certified in ISO37001 (anti-bribery management system) for the first time in 2018, Yungjin Pharm succeeded in renewing the certification in 2021, and passed the follow-up audit in 2022, currently maintaining the certification of the anti-bribery management system. We are raising the level of ethical management through the operation of a systematic anti-bribery system, such as the operation of the Fair Trade Compliance Program (CP), implementation of departmental bribery risk assessment and monitoring, and efforts to promptly handle customer complaints. We will further accelerate our ethical management by strengthening the operation in connection with the Fair Trade Compliance Program (CP) in the future. This will be the foundation for Yungjin Pharm's establishment of sound ethical management culture and growth to a global pharmaceutical company.”
- Do you have more messages to emphasize.
“Yungjin Pharm has been steadily implementing efforts related to ESG management, which has been gaining more attention in recent years, including building a sound corporate culture and labor relations, conducting various contribution activities for community development, and strengthening shareholder-friendly policies and internal monitoring and control. In particular, we acquired certifications of the international standards ISO14001 and ISO45001 in 2022, recognized as safe and eco-friendly production facilities at the global level. As a result, we received an overall grade of A from Sustinvest, which evaluates companies on a sliding scale based on their size, and a B+ from the Korea Institute of Corporate Governance and Sustainability, the same as the previous year. This can be analyzed as a positive result of Yungjin Pharm's process and efforts to upgrade its ESG management system. We will continue to strive to build an ESG management system. Based on this ESG management and anti-bribery management system, we will leap forward to become a top-tier domestic and global pharmaceutical company.”
[WIKI KOREA=Cho Pil Hyun, Staff Reporter]
chop23@wikileaks-kr.org
