SPC Group has marked one month since it launched holding company Sangmidang Holdings (SMDH), putting accountable management and safety at the forefront. A major fire in the interim has put SPC’s safety management back under scrutiny. The plant that caught fire was the site of a fatal accident in May last year when a woman in her 50s was trapped in machinery. Critics say the purpose of launching Sangmidang Holdings has been undermined in just a month.

SPC Group launched Sangmidang Holdings, its holding company, on Jan. 13 and shifted to a holding company system. The move aims to build a transparent corporate structure and professionalism in line with a rapidly changing business environment and expansion of overseas operations.

Unlike the previous SPC Group structure in which Paris Croissant acted as a de facto holding company controlling most affiliates, SPC separated the business division from Paris Croissant, making Sangmidang Holdings a pure holding company. Sangmidang Holdings, named after the bakery "Sangmidang" founded by the late honorary chairman Huh Chang-sung, serves as a control tower to strengthen environmental, social and governance aspects.

At its launch, Sangmidang Holdings put safety management front and center. It said it would ensure key values such as compliance, safety and innovation are consistently implemented across affiliates. This is seen as showing determination to solve recurring safety accidents under the SPC Group structure.

But the recent fire at the Siheung plant exposed gaps in the safety management pledge made when Sangmidang Holdings was launched. According to the Gyeonggi-do Fire and Disaster Headquarters and others, 3 of 12 workers on duty at the time inhaled smoke and suffered minor injuries.

The fire was large enough that fire authorities issued a "Response Level 1" alert, mobilising equipment from 3 to 7 fire stations. About 50 pieces of equipment, including pump trucks, and about 130 firefighters were deployed. In particular, an official investigation found the building, where 544 people were working at the time, had indoor hydrant equipment but no in-house sprinklers installed.

With the Siheung plant halting production entirely, disruptions emerged in supply to business-to-business clients such as burger chains. SPC Samlip supplies buns to dining brands in and outside South Korea, including Burger King, Shinsegae Food, Lotteria and KFC, raising concerns over a bun supply disruption. SPC Samlip said the Siheung plant continued production using alternative facilities in Seongnam and Daegu, and supply is known to have resumed from Feb. 5.

In addition, its ability to manage safety issues came under scrutiny again. The plant had a fatal entrapment accident in May last year, drawing more attention to the latest major fire. At the time, a woman in her 50s was applying lubricant to a cream-bread cooling conveyor belt machine when her upper body was caught in the conveyor belt. She was taken to hospital but died.

As fatal accidents and other safety incidents continued at its factories, SPC Group announced anti-recurrence measures in succession. When a consumer boycott spread after a fatal accident at its Pyeongtaek SPL plant in 2022, SPC Group launched an SPC Safety Management Committee made up of external experts and promised to invest about 100 billion won in safety management over 3 years. After another fatal accident occurred 3 years later, SPC Group announced a plan to add more than 60 billion won to its safety management budget through 2027.

Immediately after the fatal accident, on May 19 last year, it also posted an apology titled "SPC Samlip follow-up measures for safety accident" pledging to prevent recurrence.

The company, in the names of Hwang Jong-hyun (황종현), SPC Samlip’s managing chief executive, and Kim Beom-su (김범수), SPC Samlip’s business chief executive, set out pledges including strengthening the safety system through monthly safety inspections and a monitoring system for quarterly joint safety inspections with external professional organisations. It also pledged to rebuild a safety-centred production system by improving production line operations and workers’ work arrangements, and to build a workplace safety culture by improving practices and feeding back to sites.

But a major fire broke out at the same plant in less than a month after Sangmidang Holdings was launched. That adds to questions over Sangmidang Holdings’ commitment to safety management a month after its launch. Attention is focused on whether Sangmidang Holdings can properly demonstrate its ability to build and implement a safety management system in line with its founding purpose.