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Korean businessman hits jackpot with rice cooker innovation
Publication Date : 26-08-2014
Koo Bon-hak, chief executive of Cuckoo Electronics, South Korea's largest electric rice cooker maker, has become a rising star in the corporate world after his wealth jumped on a recent stock listing.
On August 6, Cuckoo Electronics listed 9.8 million shares on the nation’s main stock bourse. During the ensuing 20 days, share prices skyrocketed 60 per cent from the initially offered price of 104,000 won. On Friday, it closed at 186,000 won ($182). On that day, the firm’s market capitalization reached nearly 2 trillion won ($1.96 billion). Accordingly, the assets of the 46-year-old CEO - who holds a 33.1 per cent stake in Cuckoo - soared to 660 billion won ($647 million).
Industry watchers rushed to issue a positive outlook on Koo’s burgeoning wealth based on the heated demand for Cuckoo rice cookers in Asia, where the majority of households consume a lot of rice.
“Sales are expected to rise 20 per cent to 610 billion won this year thanks to rising demand from Asian travelers to Korea who are eager to buy high quality rice cookers on their way back home,’’ said Won Sang-phil, a stock analyst from Tongyang Securities, noting that a growing number of Asian households cite a Cuckoo cooker as a must-have item.
The size of Asia’s rice cooker market is estimated at 5 trillion won, according to industry sources. The bulk of it is from China, which accounts for about 2 trillion won.
Given the figures, the 46-year-old CEO has long since been prioritizing overseas expansion.
“Over the long term, the company seeks to transform itself into an international home appliance maker,’’ Koo said in a press briefing held early this month.
Behind the popularity of Cuckoo rice cookers is the company’s ceaseless efforts toward innovation. Established in 1978 by Koo Ja-shin, the father of the current CEO, Cuckoo Electronics has been focused on the technological advancement of electric rice cookers.
By maintaining optimal heat and humidity levels, Cuckoo cookers can cook and preserve rice. The cookers also can be used to cook dishes other than rice, including rice cake and chicken soup, simply by pressing a button. Some can bake potatoes and corn as well.
“Cuckoo rice cookers have become the number one rice cooker brand in Korea boasting a 70 per cent domestic market share. It is being sold in nearly 30 countries, including the US, China, Vietnam and Russia,’’ a company official said.
Now, with the funds raised from the IPO, coupled with strong sales and distribution networks, Koo is expected to enter the Chinese market at a faster speed.
To diversify its portfolio, Cuckoo Electronics is currently invested in the water purifying business.