[Good Job SME]⑩ Handling 300,000 Items... 56 Years of Industrial Tool Distribution

Interview with Kim Jonghyun, CEO of Dongshin Toolpia
Second-generation management since 2016... "Digitalization of Tool Information"
Leap from Cutting Tools Focus to Comprehensive Distribution Company

Small and medium-sized enterprises (SMEs) are the backbone of the national economy. Numerically, 99% of companies in South Korea are SMEs. SMEs are the workplaces of the people. 81% of workers are employed by SMEs. When SMEs falter, our economy shakes and the jobs of the people are threatened. However, negative perceptions of SMEs persist. Low compensation, unguaranteed 'work-life balance,' and uncertain future growth prospects. Despite the employment difficulties, young people avoid SMEs. Yet, there are those who fight these prejudices and create good jobs and SMEs. They develop technologies that can compete with large corporations. They also devote efforts to building sound financial structures and corporate cultures to provide stable living foundations for employees. On the ground, there is the struggle of SME entrepreneurs fulfilling corporate social responsibility while nurturing companies where employees can take pride. Asia Economy visited the field and heard their voices directly.

Men have a dream of owning a high-performance tool set at home. From children who enjoy assembling toys, students who need to complete vacation assignments, to adults passionate about self-interior projects. Nowadays, famous overseas tool brands can be easily purchased online, but it was not always so. In the 1960s, to buy proper imported tools, one had to search through various tool markets. Even then, most of the tools were ones cleaned and oiled from those that leaked out of U.S. military bases.

Dongshin Toolpia is a company that has distributed industrial tools domestically for 56 years, satisfying men's collecting desires. Chairman Kim Dong-yeon worked at 'Donghwa Kigongsa,' a tool distribution company founded by his cousin in 1968, and acquired it in 1983, growing it into today's Dongshin Toolpia. As of last year, it is a solid mid-sized company with sales of 160 billion KRW. Since 2016, Kim's eldest son, CEO Kim Jong-hyun, has been leading the company. It is the number one company in Korea for cutting tools.

Kim Jong-hyun, CEO of Dongshin Toolpia, is explaining about the company in an interview with Asia Economy.

Meeting CEO Kim at the headquarters in Doksan-dong, Geumcheon-gu, Seoul, he introduced the company, saying, "We started with tool distribution, but now we are a comprehensive distribution company selling protective clothing, gloves, water, and ramen." CEO Kim's father grew Dongshin Toolpia into a company strong in cutting tools, tooling?which configures optimal processing conditions for each product?and tool accessories. Taking over the company during its leap to a comprehensive distribution company, CEO Kim focused on diversifying product assortments and optimizing systems and logistics infrastructure for smooth storage and delivery.

The 10-story Seoul logistics center located right next to the Doksan-dong headquarters had literally everything. Each floor was packed with storage cabinets capable of holding thousands of items, each compartment labeled with serial numbers and barcodes to manage inventory in real time. When orders come in, items on each floor are transported via conveyor belts and elevators to the first-floor collection area. From there, they are shipped nationwide to tool stores and other destinations by delivery trucks. Dongshin Toolpia operates logistics centers in Seoul, Ochang, and Busan. They handle over 300,000 product items.

Various products are displayed at the Dongshin Toolpia Seoul Logistics Center in Doksan-dong, Geumcheon-gu, Seoul.

CEO Kim majored in International Trade at university and then went to the U.S. for further studies, where he worked for a global renowned tool company. After returning to Korea, he joined Dongshin Toolpia in 2005 and gained practical experience in purchasing, sales, management support, and system development before becoming CEO. In 2015, under his leadership, the company published the Korean Industrial Supplies Tool Comprehensive Catalog 'KTH-4' (KOREA TOOL HOUSE). It included about 110,000 tool items such as cutting tools, power tools, welding equipment, and industrial safety products, with QR codes for real-time price and information checks. CEO Kim said, "Applying QR codes to a tool catalog was the first in Korea," adding, "I believed that combining tools with IT would make them more familiar to the public."

Dongshin Toolpia also owns its own brands such as 'Sunkey,' 'KDY,' and 'EX Power,' which account for about 30% of total items. Increasing competitively priced in-house products and selling directly to general companies or consumers would help company sales but inevitably reduce the share for client companies. CEO Kim said, "Coexistence with client companies is important, so we appropriately adjust the proportion of our own products," adding, "If we blindly push our products, it would betray the trust of client companies who have entrusted us with product distribution."

Dongshin Toolpia's domestic sales far exceed overseas sales, but it plans to expand its overseas market. Currently, Vietnam is the main market, and exports are also made to the U.S. and Europe. CEO Kim said, "We entered Vietnam six years ago to explore sales channels but could not make significant progress due to the sudden COVID-19 outbreak. However, since the Vietnam branch manager stayed locally without returning home and built trust with various companies, the current atmosphere is positive," expressing optimism.

CEO Kim leads the company with his siblings: younger sister Kim Myung-sun, Director of Management Support, and youngest brother Kim Soo-hyun, Head of Marketing. Chairman Kim, their father, advises them to keep challenging themselves but leaves company operations to them with minimal interference. CEO Kim said, "We do not have the capability to develop and produce products ourselves, but we have a rich database based on long-standing customer relationships," adding, "Based on this, we will focus more on our role as a comprehensive distribution company that promptly procures market-demanded products and grows together with the manufacturers."

A delivery truck is waiting to be dispatched at the loading dock on the 1st floor of Dongshin Toolpia Seoul Logistics Center in Doksan-dong, Geumcheon-gu, Seoul.

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