Hyosung Steps up Presence
in Chinese Power Market
Striving to foster power distribution & transmission industry as its strategic sector together with industrial material and advanced chemical fiber fields

Hyosung is striving to become one of China's top three electric transformer companies through M&As.
Hyosung announced on March 23 that it inked a deal to take over Nantong Yaubong Transformer Co. in Jiangsu Province. Nantong Yaubong with an annual capacity of 6000MVA is one of China's five electric companies churning out government-certified electric products, including 220kV ultra-high voltage electric transformers.
The latest acquisition of the Chinese electric transformer company is part of Hyosung Power & Industrial Systems Performance Unit's (PU) strategy to explore overseas markets. Hyosung entered China's power distribution and electric transformer market in 2004 when the company established Baoding Hyosung Tianwei Group, a joint venture with Baoding Tainwei Group. Hyosung's acquisition of Nantong Yaubong caps the Korean company's full-fledged entry into the Chinese power transmission and distribution market.
Hyosung officials said Hyosung's acquisition of Nantong Yaubong would cost an estimated 100 billion won. Both sides decided not to disclose it, but additional investments will amount to some 100 billion won, they said.
Cho Hyun-moon, president of Hyosung Power Systems PU, said, "The latest acquisition is made in accordance with Hyosung's long-term strategy to make a foray into foreign markets, and its entry to China will target not only the Chinese market but also serve as a bridgehead for exploring Southeast Asian markets."Baoding Hyosung Tianwei Group will construct an advanced plant with an annual capacity of 25,000MVA, and Hyosung plans to take over another Chinese electric transformer company with the goal of becoming one of the three major players in the Chinese power transmission and distribution market. Hyosung also plans to enter the Chinese heavy electric markets, including circuit breakers and electric motors.
The value of the Chinese transformer market is worth about $3 billion, about tenfold of that in Korea, and is likely to maintain constant growth as China will build up more infrastructures in run-up to the 2008 Beijing Olympic Games and 2010 Shanghai EXPO, Hyosung said.
China is striving to expand power facilities to cope with a shortage of power China has suffered from a lack of investments into projects to expand power facilities since the late 1990s. The Chinese power facility industry posted an annual average growth rate of 23 percent during the period between 2000 and 2005.
Chinese authorities intend to raise China's power generation capacity from 430 million kW as of the end of 2005 to 580 million kW in 2010 when the 11th five-year development plan ends. Given Koreas's power generation capacity of 60 million kW, the planned 150 million kW increase in power generation capacity is equivalent 2.5 times as much as the combined capacity of power stations in Korea. China's investments into the power generation industry are projected to range from 20 trillion won to 30 trillion won per annum. In particular, China is expected to funnel between 10 trillion won and 20 trillion won annually into projects designed to generate power through uses of rich resources in the western region and transfer to such electricity-gulping cities as Beijing, Shanghai and other districts in the east coastal areas and other projects.
Hyosung is trying to foster the power distribution and transmission sector as the company's strategic industry together with industrial material and advanced chemical fiber fields. To this end, the company has strengthened M&As abroad, expanded global export markets and beef up efforts to explore new businesses in the alternative energy sector. nw

Kim Jae-hak, president of Hyosung Power & Industrial System Performance Group shakes hands with his Chinese counterpart after singing an agreement on the acquisition of Nantong Yaubong Transformer Co.