Public enterprise supply should be used as ‘seed money’ to strengthen competitiveness through technology development, etc. > Press release

Written: Thursday, October 3, 2019

(Interview) Choi Sung-gyu, Chairman of the Transformer Association

Use public enterprise supply as ‘seed money’, strengthen competitiveness such as technology development

The unit price bidding for KEPCO distribution transformers, which is the biggest concern of the small and medium-sized transformer manufacturing industry, has been concluded. The bidding ended with the victory of the consortium of the Electric Power Association (Chairman Kwak Ki-young) and the Transformer Business Association (Chairman Choi Sung-gyu). Choi Sung-gyu, Chairman of the Transformer Association, said, “This KEPCO unit price bidding produced generally satisfactory results in terms of the secured quantity and the winning bid price,” and “It was not an easy bidding in many ways because there was only one bidder, but I am glad that we received a good report card in the end.” Since taking office as the 4th Chairman of the Central Transformer Business Association in 2008, Chairman Choi has been leading the transformer industry since the name was changed to the Transformer Association in 2013. Elpowertech, which he operates, is considered a global company representing the transformer industry. In this KEPCO bid, the Transformer Business Association Consortium, in which 14 companies participated based on the high-efficiency pole-mounted transformer mineral oil standard, won a total of 7 bids, including 2,650 high-efficiency pole-mounted transformers (50kVA, U-tap, mineral oil) at 1,468,000 won per unit and 1,015 amorphous pole-mounted transformers (100kVA, U-tap, salt-resistant) at 2,775,300 won per unit. They succeeded in winning a total of 17,780 units, worth approximately 25.5 billion won (including VAT). Chairman Choi said, “We have secured work exceeding 30% of the total bid volume, and the average winning rate is good at around 95%,” and added, “Now, member companies should use the KEPCO work as a stepping stone to strengthen their inherent competitiveness as companies.” He especially emphasized that it is time for companies to take a sober look at the purpose of KEPCO’s transformer cooperative system. Chairman Choi said, “The cooperative system of public enterprises is for securing jobs and fostering small and medium-sized enterprises,” and “The passage of a bill last August that does not view joint sales by small and medium-sized enterprise cooperatives as unfair acts such as cartels or collusion is in the same context.” He is saying that the public enterprise supply market should be used as a kind of ‘seed money’ to improve competitiveness through technological development and other means to develop domestic and international markets. Chairman Choi emphasized, “The idea of making a profit and doing business in the KEPCO market itself is a very complacent and wrong judgment,” and “We should be able to create new added value using the public enterprise supply market as a minimum foundation.” He also advised, “Considering the current bidding structure, it is structurally almost impossible to make a profit in the KEPCO market,” and “Transformer manufacturers should not settle for the government-funded market, but should look to a bigger stage and take on the challenge.” He finally added, “Compared to the unit price bidding contract volume last year, KEPCO’s actual order volume was only about 75%,” and “I hope that KEPCO’s actual purchase will be as close as possible to the contract volume so that companies can secure a minimum amount of work.”

Reporter Song Se-jun 21ssj@electimes.com

[This post was copied from the press release (Korea) by the highest administrator on 2022-08-25 11:21:28]