The second largest manufacturer of steel in South Korea is expanding its role in the construction equipment market. Hyundai Steel Co. announced this week that it is going to invest 94.4 billion won ($89 million USD) by the end of the year to increase its production capacity of construction equipment parts.
Hyundai Steel Co. hopes to meet growing demand in China and Japan for excavators and related parts.
Global demand for excavators is expected to rise by 11 percent a year through 2015 as countries like China, India and Brazil continue rapid industrialization and Japan renovates its existing infrastructure.
Hyundai Steel Co. plans to expand output of track shoe assemblies up to 130,000 a year, a 50 percent increase in production capacity. The company already accounts for 30 percent of the world’s track shoe assemblies, the continuous belts that fit over the cogged wheels of excavators.
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Hyundai Steel previously used electric arc furnaces to make its steel, but switched to more efficient blast furnaces in 2010. The company already has two blast furnaces in use and started construction on a third furnace in April.
Since making the switch last year, Hyundai Steel was able to expand its annual production capacity to 20 million metric tons.
Since announcing its plans for expansion this week, shares for Hyundai Steel Co. have risen by 1.5 percent to 136,500 won in Seoul trading, the highest close since May 6. The company is a part of the Hyundai Corporation.