To Expand Presence in U.S. Market
Hyosung Heavy Industries announced on Dec. 16 that it will take over the high voltage transformer plant of Mitsubishi Electric Power Products, Inc. (MEPPI) in Tennessee, the United States, for US$46 million.
The Tennessee plant will begin to produce core-type ultra-high voltage transformers, which are used in all industrial sectors, in the first half of next year. The transformers are produced by placing high-voltage and low-voltage coils around iron cores. More copper than iron goes into them. They account for 95 percent of demand from the global transformer market including North America.
"We have decided to make this investment after taking into account a continuous increase in power consumption in the United States, an expanding renewable energy industry, and a jump in demand for power equipment replacement due to aging power infrastructure," Hyosung said.
Hyosung also looks to boost its competitiveness in the U.S. market by securing a local production base as the United States has taken protectionist measures such as imposing 40 to 60 percent anti-dumping tariffs on major Korean high voltage transformers.
The U.S. ultra-high voltage transformer market is estimated at two trillion won, and Hyosung Heavy Industries has been maintaining long-term partnerships with major U.S. power generation companies since entering the U.S. market in 2001.