Korean showcase

18 March 2008

Every two years the Korean construction equipment industry gets together for the Conex exhibition. The five-day show was held last month in Ilsan, to the North of the capital, Seoul, re-visiting the Kintex exhibition hall that played home to Conex in 2005.

The earthmoving sector in Korea is dominated by Doosan, Hyundai and Volvo, the latter establishing a strong foothold in the country with its acquisition of Samsung Heavy Equipment's excavator business in 1998. But beside this trio, the country boasts a wealth of attachment makers-particularly hydraulic breakers-and manufacturers of concrete machinery and lifting equipment.

Just like the wider, export-driven economy, many in the equipment industry focus on overseas markets rather than sales in Korea. this strategy has paid off thanks to the remarkable growth seen in the world markets over the last four years or so, and the bright outlook-apart from in the US-means that many of the exhibitors at Conex had new models to show and ambitious plans for the future.

New backhoe

A prime example is Hyundai, which is keen to expand its range from the traditional mainstays of excavators and loaders into new markets. Having announced late last year that it would build its first factory in India, Hyundai now says this plant-originally just for excavators-will be used to launch a new equipment range.

Woo Dong-gu, general manager of Hyundai's North American and European sales department told iC, “Our long term target is to be 5th in the industry by 2012. In order to do this we need to focus on markets like India. We will also make backhoe loaders there. That will be a first for us.”

Filling in the details, he added, “On June 19 this year we signed a memorandum of understanding with the state government

Maharashtra in India to establish a construction equipment operation and factory. Hyundai will invest US$ 50 million in this new factory in June. It will have an area of 33000 m2, on a 200000 m2 plot. Production will start in July.”

The launch of a backhoe loader next year is part of a bigger programme of new product introductions according to Mr Woo. “We only have excavators and loaders so we are looking at growing our range. The first will be backhoe loaders and after that articulated dump trucks (ADTs) and all-terrain (AT) cranes. In the case of ADTs and cranes, we are also thinking about acquisitions or OEM supply agreements. Th at will shorten the introduction time of course.”

The strength of the markets is a key driver for Hyundai's expansion plans, and Mr Woo was generally upbeat, although there is one problem area.

“All markets are good except North America,” he said “We forecast that this downturn will continue until the end of next year, so we are going to concentrate on other areas. Last year we have +45% growth and our target this year is another +20%.”

Breakers

Another export-oriented company is breaker manufacturer D&A. In fact it is export-oriented to the extent that it does not sell any of its equipment in Korea. Company president K. W. Koo explained, “We mainly sell overseas. There's too much competition and too many small companies in Korea that come to the market with lower prices. Their quality is not the same as ours.

“We believe we make the best breakers in Korea. We have just invested in a computerised test bed at our factory, and we test 100% of the units we produce for at least 20 minutes each before shipping them.

The focus on exports, particularly to Europe, which Mr Koo says accounts for 70% of the company's sales continues to influence D&A's development plans. “Silenced breakers are very important for the European market. It is also important to have small breakers, because it is becoming more difficult for companies to use hand tools due to the vibration,” he said.

This means the company will continue to develop what it offers. “We will expand our anti-blank firing system to the full range as a standard feature. There will be no extra cost for the customers. We may also consider making a bigger model next year,” he said, acknowledging the demand for bigger units. At the moment D&A's biggest model is the 3.8 tonne 550V for 40 to 60 tonne excavators.

This is something that Taeshin Heavy Industries also sees. Vice president Dong Wook Kim toldiC, “There is a trend for bigger and bigger breakers. The 700 is our biggest at the moment, but we might build a bigger one if there is enough demand.”

At 5.2 tonnes operating range, making it suitable for 55 to 70 tonne carriers, the TB700G is bigger than most manufacturers’ top of the range models. However, the company says the key ingredient for success is building good, reliable breakers whatever their size. “Customers are looking for power and durability,” said Mr Kim.

The biggest breaker available in Korea is, according to its manufacturer Everdigm, the new RHB 370BA, which weighs in at 6.7 tonnes, and is designed for 65 to 85 tonne carriers.

The company, which changed its name to Everdigm from Hanwoo at the start of this year, offers the widest range of attachments from any of Korea's manufacturers. In addition to its breaker range, it offers a variety of demolition tools, as well as some interesting and unique machines.

One such attachment is the RHC 205C, a core-drill for mounting on excavators. The tool is designed specifically for the

Korean market, and is intended for rock splitting-the idea being that once a core has been removed, hydraulic shears can be inserted into the hole, which can be opened to split the boulder apart. this method produces much less noise and vibration than breaking rocks with a hydraulic hammer.

Other new launches at Conex included the RH 532C pulveriser for 28 to 36 tonne excavators, the RMB 14 multi-bucket for 12 to 16 tonne excavators, and a new design of quick hitch.

Jong Hyuk Lim, director of research and development at Everdigm's attachment division toldiC, “Breakers are about 50% of our revenues, but most of our competitors just make breakers. We have a range of other attachments too. The Korean breaker market is very competitive.”

Another manufacturer that offers other demolition attachments besides breakers is Daemo Engineering, and the company used Conex to launch its largest shears to date, the DMS 500 for 50 tonne+ excavators.

As well as seeing growth in export markets, Daemo also says its customers are putting a greater value on durability-even in notoriously price-sensitive markets like China. A company spokesman said, “People in China want a good quality product now. Two years ago they just wanted any breaker, but that's changed now.”

The consensus at Conex, notwithstanding the current weakness of the US market, was that demand for construction equipment in general is still set to climb. As far as Korea's manufacturers are concerned, that means there will be more and better machines launched in the coming years.

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