TPC Mechatronics Corp., a maker of factory automation equipment, has expanded its presence in the local market with a diverse lineup of products.
The venture firm saw its sales jump more than 40 percent in the nine months to March, outstripping Festo of Germany as the second-largest in the Korean market.
Its operating profit dramatically escalated as its clients in the automobile, electronics and chip industries increased output.
The company based in Incheon is making an aggressive push into cutting-edge technological fronts and exploring new markets in China, India and other global manufacturing powerhouses.
Charting a new growth path, company CEO Jay Uhm is betting on magnetic levitation technology widely used for high-speed train rails.
The technology uses magnetic forces to counteract gravitation, allowing faster, quieter and erosion-free movement of an object.
“We want to create things no one makes,” Uhm told The Korea Herald.
Some applications of Maglev system for factory motion control have been developed in the U.S., which has invested hugely in the field for years. But there are none in Asia that have commercialized the skills, Uhm said.
Last year, the company acquired Nanomotion Technology, a local venture firm that developed bearingless linear motors, core components for the magnetic levitation technology.
The new technology causes no abrasions, friction, noise or dust in the manufacturing process, so equipment and machines become more durable, Uhm said.
|TPC Mechatronics CEO Jay Uhm at the company’s factory in (Incheon Ahn Hoon/The Korea Herald)|
A team of experts in the company is now testing a beta version of the new equipment, he said.
The company has been actively pushing to diversify its product portfolio through its own research and development as well as takeover of other firms with superb technologies.
“We’ve sought small firms that can generate synergy with us,” Uhm said. “M&A doesn’t guarantee success. It’s not about swelling the size, but more like strategic partnerships for a win-win result.”
Founded in 1973, TPC has expanded its business scope from pneumatic component manufacturing, to electric control, to hydraulic motion control and more sophisticated automation systems.
The demand for the equipment essential to all kinds of advanced manufacturing has been constant, guaranteeing a stable income stream for the company.
Its business boomed especially in the past year thanks to recovery from the global economic crisis.
The company, which closes its books in June, saw its highest-ever growth in sales in the past fiscal year. Between July 2009 and March, its sales topped 33 billion won ($28.5 million), a 46.4 percent rise from a year earlier.
Its operating profit remarkably recovered to 3.1 billion won during the same period from a 630 billion won deficit, while net profit surged to 2.4 billion won from a 1.7 billion won loss.
Such growth led TPC to achieve a 15 percent market share, taking the No. 2 position in sales in the Korean market this year, Uhm said.
During its early years, TPC faced a challenge penetrating the local market, which was dominated by SMC
Corp., the world’s largest pneumatic component supplier headquartered in Japan, and Festo Corp., a German industrial control and automation company.
“We had to improve our competitiveness in product quality, price and delivery date to strengthen our brand identity,” Uhm said. “And we did it. Aggressive marketing strategies, the diversification of the product lineup and continuous research and development efforts led to our good market positioning.”
TPC’s clients largely involve the automobile, electronics and chip making industries.
It began to supply products to Samsung Electronics and LG
Display last year. Its other biggest clients are Hyundai Motor Co., Kia Motors Corp., GM Daewoo Auto and Technology Co. The five companies make up about 35 percent of its total sales.
Uhm expects the firm’s annual sales to reach 70 billion won by the end of June next year and 100 billion won in 2011 or 2012.
The rapid expansion of high-tech electronic gadgets’ market will further spur its growth and open up more opportunities in overseas markets such as China, India and Europe, he noted.
Currently, TPC exports 5-10 percent of its products. It has branch offices in Shanghai and California.
Profits in China would turn into the black from next year benefiting from increasing demand, Uhm said.
“China especially has large potential demand,” he said. “You can think of it as the same as Korea. Once it takes advantage of the market trend, the outcome will be dramatic.”
This is the 58th in a series of articles analyzing companies listed on the KOSDAQ, Korea’s secondary stock market loaded with tech firms. ― Ed.
By Shin Hyon-hee (firstname.lastname@example.org