Korea’s strong aggregates need is creating exciting business opportunities for construction materials suppliers and quarrying and construction equipment manufacturers.
“South Korea produces around 337 million tonnes of aggregates. With many major infrastructure projects in the pipeline like the Winter Olympics, high speed train projects, residential buildings projects, and airport expansions, the demand for aggregates is expected to go up,” says Suhen Agarwal, APAC region VP sales and services, aggregates, Metso.
A Dae-hyung Industry Co. employee keeps an eye on aggregate production at a Metso-equipped South Korean quarry??“Moreover, it creates a good opportunity for operators to upgrade the existing crushing plants and machineries with better, efficient and more productive new generation machines.”??Due to the plethora of earmarked government and private company-controlled projects, South Korea’s construction GDP is forecast to grow to US$86 billion in 2018, compared to $70 billion in 2017; with construction GDP forecast to hit $91 billion in 2019.??Agarwal says that
South Korea’s “very competitive” construction materials market is dominated by local players. Due to a shortage of natural sand, Agarwal says suppliers are increasingly focused on producing quality manufactured sand.
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A Dae-hyung Industry Co. employee keeps an eye on aggregate production at a Metso-equipped South Korean quarry[/caption]
“In the heavy civil construction market segment, customers are looking for more sturdy and reliable equipment that can give consistent performance till the end of the project.
Korean quarry owners are becoming more aware and interested in better technology for increasing capacity and efficiency of their plants. Downtime and cost per tonne are very critical for them and as such they are now more open to adapt and invest in the superior technology from Europe. Metso has a good opportunity to introduce its products and high-class technology and increase its market share,” Agarwal says.
South Korean customers are mainly using stationary crushing plant, but the introduction a couple of years ago of mobile plant, particularly Metso Lokotrack models, had been met with a “very positive response” from end users, and they are becoming more and more popular. “Our HP Cones particularly are extremely popular in Korea and have made a niche positioning over competition,” Agarwal says.
A few years ago, small-to-medium capacity plant was more popular among South Korean customers. However, due to quarry licence issues, more and more larger plant with higher capacities are being demanded by customers, he says.??“South Korea has stringent quality regulations. There is a very strict regulation to check the quality of aggregates both for asphalt and concrete. Hence, most of the quarry owner’s/aggregates producers are concerned about the shape of the aggregates and the gradation.
This increases the demand for better latest generation technology and equipment.??“Businesses are also being passed over to the next younger generation who are amenable to invest in better technology and are not sensitive in initial investment, but particular on higher return on their investment. This will help premium solution companies like Metso to introduce state-of-the-art products and demonstrate better performance and get repeat business,” Agarwal says. Many quarry operators and contractors are making efforts to reduce dust and noise pollution during work hours, while also saving water and power, wherever possible.
Byun ChunSub, chief executive of Keun Woo, a 1.5 million tonne a year aggregate processor, says, “We expect demand to be flat this year as the construction of apartment blocks from last year carries over this year. Overall the market depends heavily on housebuilding and the construction of smaller apartment blocks. But there is a good range of other projects that also contribute to demand. Most of the larger infrastructure and construction projects in the country were on hold until the presidential election on May 9th.
”??The Construction Association of Korea (CAK) expects construction investment in South Korea to grow by 3% this year, compared to 2016. ??“We expect activity levels in the aggregates industry to broadly align with that and post an increase this year,” says Frederic Ruesche, vice president, Volvo Construction Equipment in Korea. “In general the market has been recovering slowly, and several major infrastructure projects are underway.”
He says South Korean demand for quarrying and heavy construction equipment is divided into two camps: high-end premium products, such as those manufactured by Volvo CE; and lower cost, or value, machines, many of which are built by smaller-sized domestic manufacturers.??From a solely Volvo CE perspective, Ruesche says the brand’s most popular products are its 38tonne and higher excavators. “In particular our EC380E and EC480E are popular, but we’re also seeing a spike in interest for our 75-tonne rated EC750E excavator. Customers especially like how well-matched this machine is to our A45G articulated hauler, a combination that delivers optimum productivity in quarry applications. From our wheel loader line, machines from our 4.8 m³ bucket capacity L180H and bigger are popular.
First published in Aggregates Business Europe
