An Investor Who Sees The Future

The political sphere once again engaged in a fierce battle over the supplementary budget and the economic hearing. When the New Politics Party refused the economic hearing, the Liberty Korea Party declared an extra-parliamentary struggle.

Even within the same party, lawmakers had complex calculations depending on their constituencies.

Lawmakers from the Honam region raised their voices, arguing that Saemangeum development should be pushed forward with speed, but lawmakers from the Seoul metropolitan area and major cities advocated caution, citing concerns about falling real estate prices and population outflow.

Regardless of the political situation, the once-stagnant Saemangeum development site began to show signs of vitality. The Saemangeum Development and Investment Agency (SDIA) proceeded with construction that had been stalled due to budget shortages, and companies that had signed move-in contracts hurried to build buildings and factories on the prepared sites.

Usually, when a new city plan is announced, speculators flock in and land prices skyrocket. However, Saemangeum was an exception.

This was because there was no private land to begin with, so no transactions could occur unless the government sold it. And currently, they are only selling sites to tenant companies.

Of course, it wasn’t that speculation didn’t occur at all.

While speculators burned by the 3rd New Town projects protested in front of OTK Company, other speculators quickly bought land in areas adjacent to Saemangeum.

Real estate in areas expected to benefit from the development—Okso-myeon and Hoehyeon-myeon in Gunsan City, Gwanghwal-myeon in Gimje City, and Gyehwa-myeon in Buan County—began to stir, and speculative real estate firms, which had been quiet for a while, also became active.

However, as there was an abundance of land to be developed in Saemangeum, the increase in price wasn’t very significant.***

I first contacted Peter Katsuyo, the CEO of ArcIT.

Hearing my explanation, he brightened up and said.

”I’ve been interested in Saemangeum for a long time myself. The Saemangeum Seawall is often cited as a must-see architectural marvel.”

“The basic design plan made by the government is already out. I’d like you to proceed with detailed designs for each parcel of land.”

Architecture is conservative compared to other industries, but recently, a significant wind of change has blown through it as well. Many related startups have emerged, and investors have also actively invested.

New technologies like modular construction, construction robots, 3D printers, and laser cutting were actively adopted, and the entire architectural process was overhauled.

The reason the architectural world suddenly began to change was, as everyone guessed, thanks to the California recovery project. As always, technology develops out of necessity.

Among these, the company considered the most innovative was, unsurprisingly, ArcIT.

ArcIT utilized AI software to manage the planning, design, blueprinting, construction, and manufacturing processes in an integrated and efficient manner, significantly reducing the time and cost involved in the entire construction process.

”We’ll proceed immediately.”

“I won’t send you the data separately.”

If it’s data needed for urban planning, ArcIT would have an easier time obtaining it than I would.

After finishing the call with CEO Katsuyo, I thought about what to do next. For a city to succeed, the role of private capital is absolute.

In other words, companies need to step forward.

Even if OTK Company’s market capitalization is larger, the company wielding the most influence in Korea is undoubtedly Seosung Group. The term ”Republic of Seosung” didn’t come about for no reason.

The group’s market capitalization had already surpassed 700 trillion won.

Seosung Electronics scoffed at past controversies about its peak and continued to hit new highs. This was due to the continuously rising demand for semiconductors with the spread of autonomous vehicles, as well as games being spotlighted as the next-generation growth engine. And the investment banks that had poured out negative reports and engaged in short selling had once again suffered losses.

I said to Taekgyu.

“Are you still playing Lost Fantasy Online with Chairman Im Jinyong these days?”

Taekgyu nodded.

“Of course. In fact, I’m pretty much carrying him. You could call him ’the Chairman I piggybacked to success’?”

“Perfect. Give that Chairman you’ve been carrying a call.”

***

Chairman Im Jinyong and President Im Soo-mi visited the company together.

Entering the CEO’s office, the two were startled.

“What is all this?”

A large map of Saemangeum was spread out on the huge desk, and on top of it, model buildings, like those used in board games, were placed one by one.

“I’d always wanted to try this, and Taekgyu brought them over.”

Taekgyu said.

“A real-life SimCity, perhaps?”

I really do get to do everything I want in life.

For reference, one of those small building models would cost tens of billions of won to build in reality. A slightly larger one would exceed a trillion won.

Chairman Im Jinyong looked at it with curiosity.

“You’re embarking on something enormous again. A new city development in Saemangeum. I never imagined it.”

“Actually, that’s why I asked to see you. I was hoping Seosung Group would take the lead in the development.”

Creating a new city is something that requires enormous time and capital. And there’s no guarantee of success.

“If all the urban development plans established by the government or local authorities were to proceed, even the US national budget wouldn’t have been enough. And by now, South Korea would probably be the country with the most skyscrapers in the world.”

That’s how many absurd plans there were, while nothing was properly executed.

Chairman Im Jinyong looked at me and asked.

“What are your thoughts on Saemangeum’s chances of success?”

My foresight is never wrong.

“It will definitely succeed. Because I’ll make it succeed, no matter what it takes.”

He smiled at my words.

“There’s a saying that the best way to predict the future is to create it yourself. In that case, we should join you. There’s no reason for a company to oppose large-scale construction in Korea.”

One commonality among Korean chaebol groups is that they have construction companies as affiliates.

This is because the chairmen particularly cherish and love construction companies. Why? Because there’s no industry as easy for creating slush funds as construction.

Other industries have such robust accounting and auditing that embezzlement isn’t easy. It’s hard to falsely report prices and quantities of core materials, and you can’t just withdraw researchers’ salaries in cash without tax declarations.

However, construction involves many day laborers, and it’s easy to siphon off various things. It’s hard to uncover if you record paying a daily wage of 200,000 won but actually pay 150,000 won, or record using 10 tons of cement but actually use only 8 tons and pocket the rest.

Furthermore, Korea has a long history of growth through civil engineering projects. That’s why even companies that grew in other sectors try to acquire construction businesses once they reach a certain size.

Sometimes, an unreasonable acquisition can lead to the entire group’s collapse. For example, the Woongjin Group, or the Keumho Group...

We sat down and talked.

I looked at President Im Soo-mi and asked.

“I’d like Ceylon Hotel to build an integrated resort in Saemangeum.”

She didn’t look very surprised, as if she had expected this.

“What scale are you thinking of?”

“Just as Marina Bay Sands comes to mind when you think of Singapore, I want it to be a landmark that comes to mind when you think of Saemangeum. A hotel that makes people visit Saemangeum because they want to stay there, not just a place to sleep when they come to Saemangeum.”

President Im Soo-mi tapped her fingers on the armrest.

“Do you know how much went into the construction of Marina Bay Sands?”

I’d seen it in a report.

“About 5 billion dollars, right?”

“So, we’d have to invest an amount equivalent to more than our company’s market capitalization into a single Saemangeum integrated resort. If it fails, the entire Ceylon Hotel will be in jeopardy.”

Unlike Singapore, which was already a world-class city, Saemangeum is currently just an empty plain. Naturally, the risk is bound to be high.

“On the other hand, if it succeeds, you could recoup the investment within a few years. Marina Bay Sands recouped its investment in six years, didn’t it?”

Of course, that was thanks to the casino. In reality, the hotel industry is close to a capital-intensive plant industry, so it takes a long time to recover the investment after construction. Therefore, a casino is essential for an integrated resort.

“A theme park is also planned, so demand shouldn’t be a major issue. Unlike building in a large city, you can significantly reduce land acquisition costs, and if it’s Seosung Group, you’ll be able to secure a casino operating license. If you need any other help, I’ll gladly provide support.”

Ceylon Hotel is famous as a luxury hotel in Korea. However, this is limited to the domestic market. Its global recognition is incomparable to groups like Sands or Marriott.

Contrary to its name, Ceylon Hotel’s main business division is not hotels but duty-free shops, and in fact, most of its revenue comes from duty-free shops. However, President Im Soo-mi has the ambition to grow Ceylon Hotel into a global hotel chain.

Even with group-level support, President Im Soo-mi’s personal ability was largely responsible for growing the hotel and duty-free businesses, which have little relation to Seosung Group’s core operations, to this extent. If given the chance, she could expand even further.

“What will you do if I refuse?”

“Then I’d have to entrust it to Sands Group, SJM Holdings, Paros Hotel, or Litae Hotel, I suppose.”

President Im Soo-mi, who seemed to be pondering for a moment, soon smiled and said.

“CEO Kang Jinhoo, you’re giving me a great opportunity. I’ll try to build the world’s best hotel, surpassing Marina Bay Sands.”

Taekgyu snapped his fingers.

“Oh! I like that confidence!”

And then he immediately placed a resort model on the map. That one model represented roughly 5 trillion won.

“I’ve received firm commitments from both Disney and Universal. However, due to investment and operational issues, they want to cooperate with local companies for their entry into Korea.”

Large corporations usually lay out business plans several years in advance. But with Saemangeum suddenly inserted into these plans, they don’t have much capacity to focus on it.

The most famous theme parks in Korea are Neverland and Litae World. Having been in the business for decades, both groups possess theme park operation know-how.

“Universal is being approached by Litae World, and Disney is also looking for a partner.”

The site where the theme park will be located is only 2 percent of Saemangeum’s total area. However, the economic impact is enormous. One research institute analyzed that since the opening of Shanghai Disneyland, an economic effect of 100 billion yuan has been generated annually.

“This might be presumptuous, but if you’re thinking of cooperating with Disney, I’d like to make a suggestion.”

Chairman Im Jinyong smiled and said.

“Please feel free to speak your mind.”

“How about transferring the theme park operation rights currently held by Seosung Corporation to Ceylon Hotel?”

Theme parks and integrated resorts are interconnected businesses and can be considered the core of Saemangeum’s tourism and leisure. It would be better for President Im Soo-mi to manage them all at once, rather than the already busy Chairman Im Jinyong.

Chairman Im Jinyong and President Im Soo-mi looked at each other for a moment.

Power is something not even shared with blood relatives, as a rule.

However, with Chairman Im Jinyong already having perfectly seized control of the group’s management and receiving the support of shareholders, there was no need for him to continue operating the resort business, which had little relation to the core business and didn’t generate significant profits.

Taekgyu added a word from the side.

“Chairman Im will have many other things to do with us separately.”

Chairman Im Jinyong nodded.

“For management efficiency, that seems like a good idea.”

“That’s a relief.”

It would be good to entrust the integrated resort and theme park side to President Im Soo-mi from now on.

“More importantly, what are you going to do about the political sphere? If the National Assembly keeps obstructing, it will significantly disrupt the plan. There are strong voices of opposition to the government’s current supplementary budget even within the ruling party. As you know, supplementary budgets are about constituencies divvying up the spoils. It’s not just the Liberty Korea Party; lawmakers from other constituencies whose existing development plans have been scrapped won’t stay quiet either.”

Taxes are ”blind money,” and there’s nothing better than taking credit with other people’s money.

That’s why, during the supplementary budget review process, each lawmaker sends countless notes containing constituency grievances to secure even a penny more of the budget. But this time, due to the Saemangeum development, even originally planned budgets are on the verge of being canceled. Many people won’t like that.

“Politics is for politicians to handle. I just do what I have to do.”

Chairman Im Jinyong agreed with me.

“Indeed. If companies make the first move, the political sphere will also feel the pressure.”

I leaned back in my chair and said.

“So, speaking of which, please gather the companies interested in Saemangeum.”

***

Emerald Hall, Namsan Ceylon Hotel.

Here, large corporations, including the nation’s top 10 conglomerates, and small to medium-sized enterprises (SMEs) gathered. It was the first time so many executives had gathered in one place since the meeting regarding Japan’s export restrictions.

Outside, a throng of reporters lined up, vying to interview the business leaders as they entered.

Since when was everyone so interested in Saemangeum?

When I appeared at the entrance, reporters rushed over, thrusting microphones at me.

“Are you really going to develop Saemangeum?”

“What do you think about the criticism of collusion between politics and business?”

“There are suspicions that you’re just buying land cheaply and planning to ’hit and run’.”

“Are you willing to attend the economic hearing?”

To proceed with the development as planned, there are countless things to do, from the supplementary budget to the proposal of related laws. If I don’t attend, they’ll likely boycott the supplementary budget review and the National Assembly schedule, continuing to be obstinate, right?

Even if we start right away, it’s a situation where we don’t know when it will end, so this kind of trouble from the very beginning is problematic.

I looked at the camera and said.

“Of course. If necessary, as a citizen, I will gladly attend.”