Elpowertech, $150 million order win Sanil Electric, sales exceeded 100 billion last year Sungjin General Electric, $20 million supply contract
“In the future, the transformer industry will be divided into companies that export to North America and those that do not. The North American market is expected to have abundant demand for transformer replacement until at least 2028. Future survival and growth depend on developing North America.” (Han Sang-wook, CEO of Dongmi Electric)
2022 is expected to be a monumental year for the small and medium-sized transformer industry.
This is because many companies have succeeded in making a soft landing in the North American market, which had been virtually barren. The reason why the largest and most advanced markets were nothing more than a ‘pie in the sky’ for small and medium-sized companies was because global companies and local companies dominated the market.
However, COVID-19 has turned this huge table upside down. With the collapse of the supply chain, the resulting delay in delivery by existing companies, and the demand for transformer replacement in the North American market, domestic transformer companies have found a niche to attack the market dominated by large companies. Of course, this is an opportunity limited to companies that have been strengthening and preparing for overseas export competitiveness for a long time, such as Sanil Electric, Elpowertech, and Sungjin General Electric. This export rally trend is expected to continue this year.
Sanil Electric (CEO Park Dong-seok) is considered the undisputed leader in transformer exports in the industry.
Excluding large corporations, it was the first transformer company to surpass $10 million in exports in 2009, and it quickly grew into a global company by receiving the $30 million export tower nine years ago.
In particular, Sanil Electric is certain to surpass KRW 100 billion in sales thanks to its brisk exports last year. It is estimated to be around KRW 120 billion, the largest ever.
Elpowertech (CEO Choi Sung-gyu), which is considered the leader in North American exports, is also drawing attention for its activities this year.
Since 2021, Elpowertech has been growing into a global powerhouse by continuously achieving remarkable results in North America.
In 2021, it signed a contract to supply pad transformers to the Los Angeles Department of Water and Power (LADWP) in the United States and participated in the construction of a large power grid, and in 2022, it signed export contracts worth a total of over $100 million with six major power agencies in the United States. The contract amount is $150 million. It has also completed registration as a partner selected by leading power companies with over 100 years of history. It is on par with ABB and others.
CEO Choi Seong-kyu said, “2022 was a meaningful year in setting the present and future of Elpowertech. After the pandemic, we expanded our export horizons to the Japanese, Southeast Asian, and US markets and achieved actual results.” He added, “Once the ongoing factory expansion for export responsiveness is completed, our production capacity will increase by 1.5 times compared to the current level.”
He added, “We are targeting sales of 120 billion won in 2023. Exports are expected to account for around 70%.”
In the future, Elpowertech will supply a total of 20,000 pole-type transformers and pad-type transformers to the US.
In particular, we have obtained UL (US safety standard) certification for 34.5kV 5,000kVA or less oil-immersed transformers and 23kV 6,000kVA or less dry-type transformers, so we are ready to expand our reach in the vast local market.
Choi Seong-kyu, CEO of Elpowertech, said, “We have been preparing steadily for the past five years to obtain UL certification,” and “Both dry-type and oil-immersed transformers have a wide voltage coverage, so we have laid the foundation to supply most transformers.”
Elpowertech has been focusing on exports for a long time as part of a mid- to long-term strategy to build a stable portfolio in exports, government supplies, and civilian markets.
This is because we judged that in order for major items such as transformers, switches, and systems to maintain competitiveness in the face of rapid market changes in the future, it would be difficult for sales ratios or market shares to be biased to one side.
CEO Choi said, “The US market is a competition between local companies, Japan, and us, but there are increasing calls for domestic transformers with excellent quality,” and “There are only about 10 countries in the world, including ours, that can properly manufacture transformers.” This means that there are endless opportunities.
He said, “The growing demand for power equipment in the US can be a huge opportunity for our companies,” and “We have reinvested more than 10% of our annual sales into R&D, and 20% of our total employees are professional engineers. Based on this, we will further accelerate overseas exports based on our R&D competitiveness.” In particular, he emphasized, "In order to secure continuous overseas orders and expand production capacity, we broke ground on a new 6,000-pyeong plant in early August," and "Once the new plant is completed by the end of this year, we will secure an annual production capacity of 100 billion won."
Sungjin General Electric (CEO Kim Jeong-hwan) also succeeded in entering the North American market by signing a transformer export contract worth a total of 20 million dollars with two major U.S. power agencies last year.
It is evaluated that the proposal of amorphous cast-iron transformers to the U.S. power agency, considering the shortage of transformer steel plates, was effective. They actively promoted domestic transformers that are cheaper than European ones and have superior quality compared to Chinese ones, resulting in a large-scale order.
The annual export volume, which was around 4 million dollars, increased by nearly 5 times to 20 million dollars in one fell swoop.
Sungjin General Electric will supply amorphous cast-iron transformers to the Ohio Power Agency and the Oklahoma Power Agency in the future. The number of units is approximately 5,000, with 75kVA and 100kVA ratings.
Kim Cheol-oh, director of Sungjin Electric, explained, “The Ohio Power Authority (AEP) is considered one of the top five power agencies in the U.S. that supplies electricity to Texas,” and “As news of the contract with AEP spread, inquiries are pouring in from other power agencies in the U.S.”
CEO Kim Jeong-hwan said, “If we expand our horizons to the global stage, the status of a transformer business can ultimately change depending on whether or not we can enter the U.S. market,” and “Technically, if we enter the U.S., we have secured the ability to export anywhere in the world.”
Reporter Song Se-jun 21ssj@electimes.com