Hyundai Steel invests in construction machinery parts

By Kim Tae-gyu

Hyundai Steel, one of the leading iron manufacturers in Korea, has decided to channel 94.4 billion won ($88.7 million) to strengthen its components business for construction machinery.

Hyundai expected Wednesday that the investment would substantially increase the market share of the Seoul-based outfit in the fast-growing domain thanks to rising demand in emerging economies.

In particular, the company has fixed its eyes on track shoe assembly, referring to the main undercarriage of excavators or bulldozers, which makes heavy machinery move on tracks.

``The global market for track shoe assembly is growing at an exponential pace as the production of excavators jump. The modernization of China and India as well as the recovery works of Japan after the March earthquakes have boosted the upward trend,’’ a Hyundai spokesman said.

``In order to preempt the rising demand, we have determined expenditure, which will crank up our annual facility for track shoe assembly by some 50 percent. We strive to lift our global market share to 40 percent from the current 30.’’

Although Hyundai Steel is widely known as an iron maker, the firm’s Pohang factory in North Gyeongsang Province has production lines for track shoe assembly with competitive quality.

The product was designated the world’s top merchandise by the Ministry of Knowledge Economy in 2005. To make the cut, the top merchandise should meet three requirements _ its market share must be higher than 10 percent as one of the world’s top five producers and yearly exports should surpass $5 million.

``The global demand for excavators is expected to jump at a double digit pace per annum down the road and so would that for their components. Our investment is in tandem with these expectations,’’ the spokesman said.

``In addition, we will help excavator makers when they are set to tap into global markets so we can chalk up a win-win growth together with our partners. We also share our technological edges with them.’’

Shared growth has been one of the buzzwords in Asia’s No. 4 economy with President Lee Myung-bak having reiterated its significance. Companies have come up with various measures to achieve the shared growth with their suppliers or subcontractors.