Trading giant Ssangyong has decided to prune its operations in India following the deepening financial crisis in South Korea. The $30.53 billion company has already closed its Mumbai office and is taking a close look at its operations in Delhi.
Sources said the Delhi operations would continue for the next six months but would be closely watched to avoid any unnecessary cost escalation. Ssangyong has two arms in India: trading company Ssangyong Corporation and construction firm Ssangyong Constructions.
The Mumbai office will close on December 31. Its manager will continue to operate for the western region, but from Delhi. Industry sources said Ssangyong had carried out a comparison of expenses on, and business from, the two offices and decided against the Mumbai office. Ssangyong will stay close to the policy makers in Delhi, they claimed.
A Ssangyong official confirmed the pruning and said the company had been hit by Koreas economic woes. For now, we plan to consolidate our position in Delhi, he added. Once the situation stabilises in Korea, the company will spread out in other metros. Meanwhile, it has decided to adopt a wait-and-watch approach for the next six months.
Ssangyong has floated Bharat Ssangyong Salt in collaboration with Indian company Wellprices. The salt unit in Gujarat is expected to start production this month.
Ssangyong is predominantly a trading company, with interests in steel, chemicals, textile (hosiery) machinery and power projects. The trading is done on behalf of Korean Heavy Industries Corp.
In Korea, the worsening situation has forced Ssangyong to merge three of its 16 companies, namely Ssangyong Precisions, Ssangyong Engineering and Ssangyong Constructions. Ssangyong Motors has been sold off to Daewoo Motors.
Koreas once-proud banks and chaebols have now fallen upon hard times. On Monday, Moodys Investors Service said it had lowered the ratings of 20 South Korean banks following its downgrading of Koreas sovereign ceilings to Ba1 from Baa2 on long-term debt and to B1 from Ba2 on long-term bank deposits.
