Seoul — To the Korean Explosives Groups (KEG), it was a horrible disaster. Eventually , because of economic events, it proved beneficial to this major South Korean conglomerate.
The company was the owner of the 30 tons of dynamite that exploded in a freight-car fire apparently started by a guard's candle. The explosion killed 52 people and flattened half the town of Iri in November 1977.
The tragedy proved at first a major financial setback for KEG, even though it was not found responsible.
''We had to consolidate, tighten up, and cut down our spending at a time when most Korean companies were splurging cash on ambitious expansion programs,'' explains group chairman Seung Youn Kim.
''But this proved a blessing in disguise. When the recession hit, our sales volume actually increased, while others were suffering heavily. If others had followed our example, the national economy would have been out of the woods by now.''
In turbulent 1980, when the gross national product was declining an unprecedented 5.7 percent, KEG actually boosted its sales volume 48 percent. The following year, when most companies were still looking a bit weak, the increase was about 34 percent.
The group's young, dynamic, American-trained chairman sees no reason why the fast growth shouldn't continue. Sales this year are projected to increase to almost $2 billion, compared to $1.5 billion last year.
Since 1979, KEG has been ranked among the top 10 Korean conglomerates. It wants to break into the top five in the next few years.
Although it derives its name from its position as sole domestic manufacturer of explosives, the group has wide-ranging interests, including management of one of Seoul's leading hotels, operation of the country's only independent electric-power station, oil refining, chemicals, construction, machine tools, and general trading.
Further diversification and strengthening in prospective high-growth areas is planned to ensure the group doesn't get caught with too many unprofitable businesses on its hands as the economic climate changes.