Hyundai Elevator announced the 2016 consolidated financial statement on Feb. 9, logging 1.7589 trillion won in sales and 182.5 billion won in operating profit. The figures represent a 21.4 percent jump and a 16.4 percent surge over the previous year to renew the best-ever business performances. Analysts attribute the milestone to the removal of Hyundai Merchant Marine’s financial burden.
In a recent interview, Hyundai Elevator President & CEO Bob Jang said “Hyundai Elevator ranked 1st in Korea in 2016 for the second time in a row by surpassing 120,000 units in operation, with paid contracts and the 20,000 unit barrier in annual maximum production.”
His remarks are indicative of the company’s substantial business achievements.
Hyundai Elevator serves as a kind of a holding company and cash cow of Hyundai Group as Hyundai Merchant Marine has been separated from the business group. Hyundai Elevator has recorded record business performances every year since 2011.
Hyundai Elevator owns a 41 percent share in the Korean elevator market despite still competition from such global players as Otis Elevator. President Jang shrugged off saturation in the Korean market. “The market was saturated in 2004. But the market has grown, and we see room to grow in the housing segment,” he said.
President Jang said Hyundai Elevator plans to expand the Korean maintenance and repair segment. The elevator company now sees the maintenance and repair business accounting for 20 to 30 percent of operating profit. Elevator companies have to raise their portion in the segment to maintain growth momentum. Some business sources said Hyundai Elevator is forecast to continue its growth through this year. Apartment units to be put on the market this year are predicted to plunge about 30 percent within two years, which will likely lead to a reduction in elevator sales.
Hyundai Elevator has stepped on the gas to explore overseas markets. Since he took office as president of Hyundai Elevator last March 18, CEO Jang has outlined the company’s vision for globalization. He has also unveiled five core management policies, including pursuing of a globalization drive, the strengthening of R&D capabilities, the innovating of quality and cost competitiveness, the promotion of a service mindset, and the fostering of human resources.
“China takes up about 70 percent of global elevator demand,” said CEO Jang. Hyundai Elevator’s operations in China saw return on sales (ROS) stand at a low 2 percent to 3 percent, he said. But Hyundai Elevator could succeed if the company targets China’s backwater cities rather than big cities in which global elevator makers have a strong presence. Hyundai Elevator’s plant in China is operating at a full capacity, and the design of a new plant, to be built near Shanghai by 2019, has been completed, he said.
President Jang said Hyundai Elevator has established Turkey and India as Korea’s “2nd domestic market” in which the Korean elevator company wants to make aggressive inroads. The company set up a corporate body in Turkey last year, and it plans to establish another one in India.
“We will establish a corporate body in India – a wholly owned one or a joint venture – in India this year, and in Turkey, to be served as a bridge for the company to enter the Eastern European market, we’re considering acquiring a local plant or building a new plant,” Jang said.
Under the globalization strategy, he said that Hyundai Elevator aims to raise the portion of overseas revenues from the current about 20 percent-40 percent in four years, seeing its global standing rise from ninth in the world to seventh.
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Hyundai Elevator’s Joint Venture in Turkey
CEO Bob Jang visited the head office of STFA Group located in Istanbul, Turkey, on July 20 to sign a joint venture contract between the two companies. STFA Group is a construction and energy company that represents Turkey. The company has acted as a distributor for Hyundai Elevator since 2010. In addition, the company successfully completed various landmark projects, including the construction of the Uskudar-Cekmekoy line in the subway of Istanbul, Metropol Istanbul and Water Garden, the largest shopping mall in the International Finance Town.
In particular, based on the achievement of high speed products, the company helped promote the positioning of Hyundai Elevator in Turkey. Through this contract, Hyundai Elevator acquired HMF Asansor under STFA Group and will embark as Hyundai Elevator Turkey. The elevator market in Turkey is worth about 30 thousand lifts (about 1 trillion won).
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