Invest KOREA

Optimizing Business
Supplying its products for nearly all of Korea’s industries, Alfa Laval Korea has grown rapidly with the market

The Korea operations of the Sweden-based Alfa Laval group ranks third for sales among the company’s 55 subsidiaries worldwide.

Considering Korea is vastly smaller in industrial size and population than each of Alfa Laval’s top-five performing nations, the ranking indicates an ideal country-company match.

“This is really a remarkably good fit for our products, what Korean industries need,” said Peter Carlberg, Managing Director of Alfa Laval Korea. “This is one of the most important countries for us.”

Celebrating its 35th anniversary this year, Alfa Laval Korea provides equipment and services used to heat, cool, separate and transport products including oil, water, chemicals, beverages, foodstuffs, starch and pharmaceuticals. The company’s customers range from Korea’s conglomerates to many small- and medium-sized companies across industries.

“What the Korean customers are producing is perfect for us. We can really help them with our products and solutions. They are shipbuilders, offshore, construction companies and they are in various process industries. The biggest construction companies in the world are Korean. And they are building things where our product goes very well,” said Carl-berg.

Alfa Laval started doing business in Korea in 1962 through an agent, well before the official establishment of Alfa Laval Korea in 1979.

While one of Korea’s older foreign-invested companies, Alfa Laval Korea is considered among the 135-year-old global Alfa Laval’s newer subsidiaries. The company’s early-market-entry philosophy led it to North America in 1885 and to Russia in 1903, before the Russian Revolution. In the late 1970s, Alfa Laval saw opportunities for growth in Korea, starting in its marine industry.

Today, Alfa Laval Korea focuses on the marine, offshore, petrochemical refinery, power station, food and construction industries with two offices, in Seoul and Busan, and an assembly plant in Pyeongtaek. An almost entirely Korean staff of 150 sells, assembles and provides after-sales service for three core products: centrifugal separators used to clean liquids, cooling/heating products called plate heat exchangers and pumps and valves.

Separators were Alfa Laval’s first invention, back when farmers separated the cream from milk using a centrifugal separator. Today the company’s machines are used to take particles and dirt out of most liquids and used everywhere from oil power plants to wineries. Plate heat exchangers make up the bulk of Alfa Laval Korea’s business along with the separators.

Whether it’s in a nuclear power facility or aboard a ship, production generates heat, which then requires the cooling of water or air. Alfa Laval Korea built a plate heat exchanger assembly plant in Pyeongtaek 15 years ago to meet the needs of Korea’s leading shipbuilding, offshore and other industries.

“To be able to serve the Korean demanding customers, we built the factory here, in order not to wait for [the product] to come from Europe, China,” said Carlberg. “In addition, some of the Korean customers have their own special requirements. In some cases, we need to customize a product. And in order to be able to do so, you have to be close to the customers.”

One of the company’s most interesting projects in 2013 was the 123-floor Lotte World Tower in Seoul, which will be the tallest building on the Korean peninsula and the third tallest in the world once completed in 2016. It will be equipped with Alfa Laval Korea’s heat exchangers. A similar Lotte skyscraper will be built in Busan and equipped with Alfa Laval’s products as well.

Pumps and valves used for hygienic and efficient fluid transport and regulation make up Alfa Laval Korea’s third product group. The company’s other products include Aalborg boilers, as Alfa Laval acquired the Danish Aalborg Industries two years ago, and desalination technology to make freshwater from seawater, for ships and offshore. With all of their products, Alfa Laval Korea’s goal is to optimize customers’ processes and energy efficiency.

“Today it’s all about saving kilowatts, saving energy, and there’s a huge demand in Korea of improving the processes built 20-30 years ago,” said Carlberg. “This is a big growing business here because the opportunities are actually in every factory and every building.”

Alfa Laval Korea has experienced constant growth over the decades with the growth of Korea’s industries. The company also saw an increase of 50 employees when Alfa Laval’s acquisition of Aalborg Industries merged both companies’ offices in Busan, the second-largest city of Korea and the world’s fifth-busiest container port.

Another Alfa Laval acquisition, of a Norwegian company this year that also has an office in Busan, will mean further opportunities for Alfa Laval Korea.

As the company plans to grow in other new and emerging industries of Korea, including biotechnology, healthcare and solar power, Carlberg’s task is to maintain close communications with customers.

“It’s vital to understand what are their demands in the future, what products should we develop, where will their business go, in order to serve and support them in an optimal way,” he said.

By Chang Young (young.chang@kotra.or.kr)