Continuous tracks. (Hyundai Steel)
Hyundai Steel is upping the ante in its earth-moving equipment parts business as it seeks to meet surging demand for excavators in emerging markets.
Korea’s second-largest steel mill said Wednesday it plans to pour 94.4 billion won ($88.6 million) this year alongside its suppliers into a project to establish facilities for components such as continuous tracks, track links and track shoes.
Under the plan, the Incheon-based company aims to push up its production capacity of continuous tracks, a key propulsion module for excavators, by 50 percent to 130,000 units or 300,000 tons till the end of December compared with a year earlier.
Hyundai also targets a 40-percent stake in the global market, up from the current 30 percent, it said.
“We put the construction gears as our key strategic products as demand for excavators is predicted to increase from emerging economies,” the firm said in a statement.
Sales of construction vehicle giants such as the U.S.-based Caterpillar and Terex and Japan’s Komatsu have been boosted by massive infrastructure projects and rapid industrialization in countries like China, India and Brazil.
About 60 percent of global excavator demand is generated from China.
Hyundai forecast that the segment would expand at more than 11 percent each year by 2015.
The envisioned facilities are expected to help the steelmaker diversify its business portfolio and secure fresh revenue sources.
In efforts to further rev up exports to Japan and India, the steelmaker said it plans to lift its output at existing plants at home and in Chengdu.
By Shin Hyon-hee (email@example.com)