Overseas More Famous Small Giant Company 'Paco Engineering' Targets Electric Vehicle Market

Interview with Kim Sang-sik, CEO of Paco Engineering
Responsible for plant design, manufacturing, and commissioning
Actively expanding global markets beyond Korea
Expanding to over 30 countries worldwide, including Turkey and Kenya

He started with a retirement fund of 50 million won at the age of forty. It took a full 20 years to grow into a small and medium-sized enterprise expecting annual sales of 50 billion won this year. Kim Sang-sik, CEO of Paco Engineering (pictured), recalled in an interview with Asia Economy, "At first, I barely paid the employees by drawing machine equipment blueprints for other companies."

Paco Engineering, founded in collaboration with former colleagues from a steel company, is now recognized as a strong small business that designs, manufactures, installs, and commissions complete steel sheet production plants in over 30 countries worldwide.

From China's top home appliance brand 'Haier' to the Japanese-Taiwanese joint steel company 'Yodogawa,' Paco Engineering's plants are in use. Last year alone, they secured orders worth 70 billion won.

Steel sheets are used not only in home appliances like washing machines and refrigerators but also in automobiles and buildings. Paco Engineering manufactures plants that coat these steel sheets and apply various colors. Each project is a large-scale one worth over 20 billion won, and it takes 2 to 3 years for the equipment to be installed in the actual factory. Since all production is made-to-order and always requires creating something new, precise and meticulous design is key.

Although he had accumulated experience and know-how as an engineer, breaking into the conservative steel market was not easy. CEO Kim said, "At first, steel companies only entrusted us with manufacturing parts of the equipment line," adding, "After a mid-sized company trusted us and placed a large order in 2008, word spread in the industry, and the business gradually expanded." Now, leading domestic steel producers such as POSCO Steel Sheet, SeAH Steel, and Dongkuk Steel use plants manufactured by Paco Engineering.

Continuous color coating line manufactured by Paco Engineering. This plant line is designed for producing color steel sheets, printing, and laminating products.
[Photo by Paco Engineering]

Turning early to overseas markets instead of staying confined to domestic orders was a masterstroke. CEO Kim stated, "As the domestic economy worsened and equipment investments decreased, small and medium plant manufacturers that relied on large corporations began to go bankrupt one by one," adding, "Thanks to steadily pioneering overseas markets for over ten years, we were able to continue our business without being greatly affected by economic conditions."

They are also preparing to enter African markets such as Kenya and Tanzania, where infrastructure improvements like replacing building roofs with steel plates are underway. He said, "Recently, demand has also emerged in Turkey, the Middle East, and Latin America," adding, "As our performance and reputation have accumulated, orders can now be placed with just a few video conferences." Paco Engineering's sales were 17.6 billion won in 2020 and 26.4 billion won last year. When considering total sales as 10, domestic and overseas markets account for about a 4 to 6 ratio.

While steel sheet surface treatment technology targeting home appliance and building material markets has been Paco Engineering's main business for the past decade, they plan to move into manufacturing equipment used in electric vehicle production processes. CEO Kim said, "We are in discussions after receiving development requests for equipment that produces electrical steel sheets used in electric vehicle motors and materials for electric vehicle battery cases."

He said, "Even if plant manufacturing becomes a declining industry in Korea, we will continuously strive to maintain the company's sustainability," adding, "We will devote ourselves to development that can create new added value by utilizing the technology we possess."

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