Going for growth

The South Korean city of Ulsan should be known as Hyundai city - around 60% of the households living there have at least one family member who works for the company. Not only is it home to the company’s construction equipment assembly line but it is also where the company produces 200000 cars, trucks and buses a month and up to 70 large ships a year. Ulsan also boasts a Hyundai hotel, a Hyundai department store and a Hyundai cultural centre.

Despite its presence in Ulsan, Hyundai is a relatively new company, which started in the shipbuilding business in 1972. The construction equipment division was established in 1985 and, while it has a significant market share of the Korean construction equipment and Chinese excavator market, construction equipment sales account for just 10% of Hyundai Heavy Industries’ total business.

However, the company is planning to grow its construction equipment market share outside of its home market and believes that expanding its product range and adding new types of equipment is key to achieving its aims. This year at Intermat in Paris the company unveiled its 50 tonne R500LC-7A excavator and its 30 tonne HL780-7A wheeled loader but the company has plans for more launches in 2007.

One of the biggest new models will be an excavator in the 75 to 80 tonne operating weight range, which the company hopes to unveil in the first half of next year. Hyundai is keeping quiet about the specification of the new machine, but iC caught a distant sight of one of the new models undergoing tests close to Hyundai’s Ulsan production line.

A Hyundai spokesperson told iC that the design and specification of the new excavator has not yet been finalised. However the company is working towards launching it at Bauma in Munich, Germany in April next year.

Negotiations are also underway to have a Hyundai branded demolition excavator available from next year. The high reach excavator has been developed by Hyundai’s Spanish dealer Biurrarena to meet the needs of its customers.

The machine is based on Hyundai’s 45 tonne R450LC-7 and will have 26.3 m vertical reach and a 14 m horizontal reach. According to Biurrarena, the boom can be fitted on machines with an operating weight of 36 to 48 tons (32 to 43 tonnes).

Biurrarena divisional director José Ramón Telleris Suinaga said, “The boom has a modular design which means that it can be dismantled for transportation. But it can also be shortened to allow demolition at different working heights and for the machine to be used as a conventional excavator.”

Other new machines making their debut on Hyundai’s stand at Bauma next year will be the first in a range of short tail swing excavators. But like the new 80 tonne excavator, Hyundai is keeping quiet about the final details.

Other machines expected to join Hyundai’s product line in the next few years include backhoe loaders and joystick operated wheeled loaders. The company has said that this growth will be organic, and is looking to its own research and development facilities rather than acquisitions to widen its product range.

Most of the company’s excavators and wheeled loaders are currently produced in Ulsan. (Hyundai excavators sold into the Chinese market are manufactured in China through a joint venture with Changlin). The Ulsan factory operates two 10 hour shifts per day and produces around 11500 excavators and wheeled loaders per year. But the company is already looking at expanding its assembly line to meet the anticipated growth in demand from its expanded product ranges.

However, this will probably lead to the construction equipment division leaving Ulsan and joining the company’s recently opened logistics and training centre further north in Eumsung, an hour’s drive from Seoul. According to Hyundai, moving production to Eumsung will break the construction equipment’s links with Ulsan but will give the company room for growth.