Consulate General of the Republic of Korea in Boston

In his eight-hour stay at TaeguTec Ltd. In Daegu last October, Warren Buffett said that he would have invested more had he known what the company actually looked like.
So recalls Mosche Sharon, president of TaeguTec.
 
It was not probably too difficult for the billionaire investor to recognize the intrinsic value of the company, said Sharon, who accompanied the U.S. investor during his flight from China to Daegu. Taegu is a spelling variant of the same Korean city.
 
"He definitely put a bet on our growth potential," the chief executive said.
Buffett paid $4 billion for an 80 percent stake in the industrial tool and tungsten product manufacturer in May 2006. The remaining 20 percent shares are held by International Metal-working Company Group. TaeguTec is a Korean subsidiary of IMC Group.
 
Asked what lured the world`s richest man to invest in this relatively inconspicuous company, Sharon said: "Growth and innovation. We`ve never stopped growing," With an annual sales growth rate of 20 to 30 percent since its establishment in 1952,
TaeguTec sold $400 million worth of its own brand products last year -- just less than 20 percent of IMC group`s sales.
 
TaeguTec, formally known as Korea Tungsten is not listed yet. The company officials declined to provide figures relevant to the corporate performances, saying such disclosure could affect the bargaining power in negotiations with their suppliers. The chief executive said shareholders of TaeguTec do not seem to have any immediate plans to list the company. "It`s not something that`s in our mind. We`re feeling nice about being private," he said.
 
Consumers are probably unfamiliar with the brand name, but TaeguTec is the largest cutting tool manufacturer in Korea. A wide array of TaeguTec tungsten carbide industrial products are used in the defense, steel, semiconductor and electronics industries, company officials said. The company has an almost endless client list including Hyundai, POSCO, Daewoo Shipbuilding and Marine Engineering. "Any companies that use a piece of metal are potential clients," Sharon said.
 
Mosche Sharon, born in 1948 in Romania, immigrated to Israel in 1960. As a graduate of Mechanical Engineering, he joined Iscar Metalworking Companies of Israel in 1981. Iscar is the largest company of IMC Group. Prior to joining the Korean company in April 2001, he worked as a manager in the Brazilian subsidiary of Iscar for three years.
 
It was a challenge for the foreign chief executive to run the manufacturer, which employed some 700 Korean workers at that time. The job required more profound understanding about Korean corporate culture, he said. "It was a dramatic jump. To me, it was like running the New York Times vs. a local newspaper," said Sharon.
 
His continuous efforts to transform a pure local manufacturer into a global player seem to have paid off. The company has a more diversified revenue structure and client base than seven years ago when he took office. Around 60 percent of the company`s sales come from exports. These days, he spends more than 30 percent of his time traveling abroad to meet clients.
 
The chief executive said he has focused on product development to help the company stay competitive in the global metal industry. TaeguTec allocates 10 percent of its sales turnover to research and development of new products and technologies every year. "Around 60 to 70 percent of our sales are products that are less than five years old," the chief executive said.
 
TaeguTec runs 19 subsidiaries and distributors in 80 countries. The Daegu head office, employing more than 1,000 staff, has the group`s biggest production line, and the largest R&D, services and logistics operations. Almost all products manufactured in Daegu are shipped by air.
 
He expects the global business outlook to stay murky throughout the year, citing relentless increases in fuel prices, global credit market turmoil. "Price in this business always comes after quality," he said. "Quality is something that we do not discuss any longer," he said.
 
Quality is taken for granted and managers should be able to increase its bargaining power in price negotiations by boosting productivity and performance, he said.
Sharon said the most valuable asset to chief executives is how to prioritize their work. Given that time and resources are limited, "You should be able to tell what is important and what is less important and the consequences of the events," he said.