Hyundai Construction Equipment's Largest Investment of 200 Billion KRW at Ulsan Plant
Published 14 Dec.2021 14:20(KST)
50% Increase in Production Capacity... Expansion of Construction Equipment Production Including Excavators and Wheel Loaders
Additional 4,800 Units Can Be Produced, Enabling an Annual Scale of 15,000 Units
[Asia Economy Reporter Lee Hye-young] Hyundai Genuine (Hyundai Heavy Industries Group Construction Equipment Division)'s subsidiary Hyundai Construction Equipment announced on the 14th that it will invest 200 billion KRW in the Ulsan plant to strengthen global competitiveness.
Hyundai Construction Equipment announced through a public disclosure on the same day that it will invest a total of 194.1 billion KRW over four years to expand the production scale of the Ulsan plant and simplify manufacturing processes. This is the largest investment since Hyundai Construction Equipment was spun off from Hyundai Heavy Industries in 2017 as a newly established corporation.
This investment focuses on reorganizing the inefficient production lines due to plant aging to maximize efficiency and expanding the production scale of construction equipment such as excavators and wheel loaders.
Hyundai Construction Equipment plans to first consolidate the production and assembly functions of construction equipment sheet metal parts, which were dispersed between Plant 1 and Plant 2, into Plant 2 to increase production efficiency. Through this, it is expected to shorten work time and reduce logistics costs by simplifying the manufacturing process flow, leading to improved profitability.
With the introduction of new equipment and expansion investment in the assembly line, the plant will be able to produce an additional 4,800 construction machines, becoming a production plant with an annual capacity of about 15,000 units. Hyundai Construction Equipment plans to actively incorporate ESG elements by using eco-friendly materials for interior and exterior construction within the plant and configuring production lines that consider worker safety to reduce risk factors between work processes.
Hyundai Construction Equipment expects that the expansion of production capacity through this investment will effectively respond to the favorable global construction equipment market and expand market share by region.
According to Off-Highway Research, a global construction equipment research institute in the UK, global construction equipment sales are expected to steadily prosper, recording an average annual sales volume of 1.08 million units by 2025. In particular, with the recent official launch of the 'Better World Reconstruction' targeting developing countries in the United States, expansion of emerging markets is anticipated.
Considering this global environment, Hyundai Heavy Industries Group appointed Vice President Choi Cheol-gon, an expert in construction equipment production, as the head of the Global Production Innovation Center in May and has been closely reviewing ways to maximize production efficiency at the Ulsan plant for six months.
Vice President Choi, who became CEO of Hyundai Construction Equipment last month, judged that the efficiency of the Ulsan plant is urgent to create synergy through fair competition with Hyundai Doosan Infracore and immediately decided on a large-scale investment, taking action.
Choi Cheol-gon, CEO of Hyundai Construction Equipment, said, “Strengthening the competitiveness of the Ulsan plant is the first task to achieve the Hyundai Heavy Industries Group Construction Equipment Division's goal of becoming a global Top 5.” He added, “Through this investment, we will manufacture and deliver construction equipment more efficiently, raising brand competitiveness to a higher level.”
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