01/07/2005 12:00AM

Koreans up ante by buying Exploit


LEXINGTON, Ky. - The sale of the young Storm Cat stallion Exploit to the Korean Racing Association came as a surprise to many breeders and observers. With his first crop of racing age now 4, Exploit has lifetime progeny earnings of $3 million, but despite that, he had not sired the major graded winner needed to keep a stallion competitive in the stallion season market in Kentucky.

As a result, when the KRA stepped up with an offer significantly greater than the horse's earnings potential in the immediate future, Exploit's owners took it. Emmanuel de Seroux's Narvick International brokered the deal for Exploit, and the agency's Richard Cross noted that the KRA's acquisition of the stallion is a positive indication of the way racing and breeding is expanding in the Pacific and Asia.

"The KRA," Cross said, "is a quasi-government agency, a subgroup of the department of agriculture. They have two farms. The major farm is on an island called Cheju, south of the main peninsula. There is also another farm not far from Seoul at Kwachon. There are about 25 stallions that belong to the KRA, with about six standing on the mainland. Most of the breeding is on the island."

The KRA has been active in the purchase of Thoroughbreds for several years, although especially so in 2004.

Cross said: "I've been with Narvick for six years, and we've been working with them every year I've been here. We sold 92 2-year-olds to them, as well. That project was a one-off deal because they are opening a new racetrack in Bussan, which is their second-largest city. They have one in Seoul, and the second track will open in February or March. The KRA bought the 2-year-olds, will own them, and sometime around the opening of the track, they will sell them to new owners. They have been having trial races for them now."

In its role of promoting racing and breeding in South Korea, the KRA has taken an aggressive stance in helping the industry grow there. Past successes have made them more aggressive, as with the 2-year-old venture.

"One hopes that out of a group that size, a few will be all right," Cross said. "We've sold the odd racehorse there as well, and one of those was the Mt. Livermore horse Value Play, who used to race in Southern California, and recently won a Korean Group 1." That race, however, doesn't receive a group designation outside Korea.

Since racing and breeding are necessarily symbiotic pursuits, the KRA was developed by the government of South Korea to assist in both. Cross said that the "purpose of the KRA owning stallions is that breeding in Korea is a pretty young business, and they wanted to be able to stand the stallions so that farms could afford to use them. They normally stand for free, with a lottery to determine who gets to breed to the horse.

"That is what has happened in the past," said Cross, although after the purchase of Exploit, "I'm not sure that will happen now."

Cross estimated that "probably 25 to 35 mares are sent to each stallion annually, and there are 10 to 15 other Thoroughbred stallions not owned by the KRA."

That is a small group of stallions, and there is a limited pool of mares to breed to them, but it seems to be working for Korean racing, since the KRA is expanding its activities and is buying more expensive stock.

"They have been heading in the direction of buying more expensive stallions," Cross said, "but they are headed that way a little more strongly now. We've sold them a number of stallions over the years, but the difference is that, until now, they have not been able to import horses that previously had been vaccinated for EVA, which prevented them from importing stallions that had been at stud before. With this change in regulation, they were able to import Exploit."

Byron Rogers, a representative for Taylor Made Farm, which had stood Exploit since his retirement to stud, said that "Taylor Made included a clause in the sales contract giving the farm the option to buy back the horse in the event the KRA wished to sell him or if he is retired from breeding."

This sort of clause has become common in sales contracts for stallions being exported overseas, but Cross said that there was little likelihood it would be exercised.

He said: "In the case of Korea, it is a bit of a moot point. The KRA will own the horse, will never sell him based on past history, and they have a retirement facility on Cheju that is top-class. It is a first-rate operation, with medical facilities and so forth."

In addition to good facilities and a very hospitable climate, the Korean breeding farms have more space and pasture land than some of their Pacific neighbors.

"Cheju is a volcanic island," Cross said, "and there is no shortage of big, beautiful paddocks there. The pastures are mostly on the lower slopes of a large volcano."

And Korean breeders hope to exploit this situation to develop some quality racehorses.