Boiler Industry Thriving Throughout the Four Seasons

Increase Exports and Diversify Business
Kyungdong Navien Achieves Record High Performance, Expands Gidulami Heating, Cooling, and Air Conditioning Business

Kyungdong Navien Seotan Factory.
[Photo by Kyungdong Navien]

[Asia Economy Reporter Kim Jong-hwa] Leading domestic boiler companies have succeeded in transforming from being seen as "seasonal winter businesses" to growth-driven enterprises. They are boldly targeting overseas markets with localization strategies and entering the cooling and air conditioning business, ushering in a heyday.

In the domestic boiler industry, Kyungdong Navien and Kiturami are competing for the top spot, while Rinnai Korea and Daesung Celtic form the third and fourth groups.

Kyungdong Navien posted record consolidated sales of 232.5 billion KRW in the first quarter. The securities industry forecasts that the second quarter will also achieve record-high results, indicating a clear upward trend. Kyungdong Navien found a breakthrough for growth in overseas markets.

Last year, Kyungdong Navien's overseas sales amounted to 503.3 billion KRW, accounting for 58% of total sales. After establishing its U.S. subsidiary in 2006 and targeting the old and outdated heating systems in U.S. urban areas, it rose to number one in sales in the North American condensing boiler and water heater market last year, 14 years later. It won the competition against established players in the North American market such as Japan's Rinnai by offering condensing boilers with reduced exhaust emissions and high thermal efficiency.

In the Russian market, it has raised its recognition as a "national brand of Russia" by recording cumulative sales of 1 million units within five years of establishing its subsidiary, mainly with "wall-mounted gas boilers." It also maintains the number one market share in the wall-mounted gas boiler segment in Russia.

A Kyungdong Navien official said, "As of the end of last year, 88% of domestic boiler and water heater exports were Kyungdong Navien products," adding, "Unlike in Korea, North America and Russia have less seasonal variation, and Kyungdong Navien is recognized as a reliable brand, leading to a concentration effect on 'Kyungdong Navien' products."

Kiturami Heating and Cooling Technology Research Institute.
[Photo by Kiturami]

Kiturami's sales in the boiler sector, its core business, are gradually decreasing as it expands its business in the cooling and air conditioning sector. Kiturami transformed into a comprehensive heating, cooling, and air conditioning group by acquiring and merging cooling and air conditioning specialized companies such as Kiturami Beomyang Cooling in 2006, Shinseong Engineering in 2008, and Century in 2009.

Last year, the unlisted company Kiturami Holdings recorded consolidated sales of 935.2 billion KRW. About 450 billion KRW, nearly half of total sales, came from Beomyang Cooling, Shinseong Engineering, and Century, while boiler sales accounted for about 281.3 billion KRW, roughly 30% of total sales.

In particular, industrial boilers and refrigeration air conditioning systems used in large buildings and industrial sites generate steady sales throughout the year, overcoming the weakness of being a "seasonal winter business." The "Kiturami Ventilation Plus Air Purification System," which has become a new growth engine for the group, was driven by the mandatory installation of ventilation systems in apartment complexes with more than 30 households. The "Cascade System," which connects multiple eco-friendly boilers to supply large-capacity heating and hot water, is expected to become the group's cash cow.

A Kiturami official said, "Just as global boiler companies have evolved into integrated system companies, Kiturami will grow into a world-class heating, cooling, and air conditioning company and a global energy group through business diversification."

This content was produced with the assistance of AI translation services.