Sometimes in the business world all you need to do to hit a jackpot is to diversify in an unexpected way. Take Ryu Kwang-ji, the CEO of a South Korean company called Kumyang, a small firm that specializes in foam used in the making of sneakers. The company and Ryu went through years of what Forbes calls “toiling in obscurity” before a recent leap into the completely unrelated business of rechargeable lithium batteries made for electric cars and other devices brought its fortunes on the Korean stock market to a whole new level, making him a billionaire in the process.
The incredible rise of Ryu into the billionaire’s club started when Kumyang announced its completed research into the field of lithium batteries. A half-year report released in the middle of last year revealed that the company had “acquired excellent results in electrical characteristics evaluation and safety evaluation by authorized testing and certification bodies,” a clear indication that the company was ready to meet surging demand for the batteries.
Investors agreed, and the company’s stock had a surge of its own, spiking by nearly 2000 percent practically overnight. The company hit a market cap of almost $5 billion, and as Ryu is reportedly its largest stockholder with a stake of around 40 percent, his net worth hit the billion-dollar mark along with it.
Forbes points out that the company’s flash of success could prove to be temporary, and it still has to prove itself in a complex market in which it has no prior experience. But it appears to be investing heavily in the new business, having reportedly announced both a $70 million manufacturing plant in a $25 million research and development center in the port city of Busan.
Ryu has been with Kumyang since 1998, when he came onboard as the company’s new finance manager. Three years later, he was CEO, and for most of that time the company was focused on the manufacture of certain agents for making plastic foam, used not just in sneakers but floor mats, synthetic leather, and other products.
But that’s not as profitable as rechargeable lithium batteries, which have become a boom industry in Korea. Kumyang isn’t the only Korean company to see high spikes in revenue from getting into the battery business, as companies like Ecopro and Chunbo have seen similar trajectories in recent years.