On the 5th, dozens of ultra-high-voltage transformers, each about 100 tons, that had finished final assembly were lined up at ILJIN Electric's Hongseong Plant 2, a comprehensive heavy electrical equipment manufacturer in Hongseong County, South Chungcheong Province. The products, completed after processes including winding, core (iron core) work, tank insertion, and vacuum drying, are scheduled to be delivered to domestic and overseas clients once they pass the final test stage.
Plant 2 was completed a year ago. Executive Director Kim Jeong-chan, head of ILJIN Electric's transformer business unit, said, "We currently produce about 240 units a year by combining Plant 1 (100 units) and Plant 2 (140 units)."
More than 500 people, including partner companies, are currently working at the Hongseong plant. With the addition of Plant 2, the number of technicians, often called skilled workers, increased by more than 100. Given the characteristics of transformer production, which involves many manual and complex processes, the role of skilled workers, who need 6 to 7 years of experience, is important.
After last year's plant expansion, the average operating rate at ILJIN Electric's transformer plants rose from 70% to about the mid-85% range. This year, the company has won a series of large overseas projects, and the operating rate is expected to rise to about 95% next year. The operating rate is the ratio of actual output to production capacity. Overseas transformer plants in regions such as Europe and the United States have an average operating rate of 60% to 70%.
Kim said, "As word-of-mouth spreads among overseas clients, the value of orders has been steadily increasing," adding, "Until now, we focused on the North American market, but recently we also signed contracts in Europe, which has many companies known for transformer manufacturing, following the Middle East. Starting with the United Kingdom, we plan to push expansion into Belgium and Norway."
In the first half of this year, new orders for ILJIN Electric's power equipment (transformers, circuit breakers) institutional sector totaled about 256 billion won, recording 66% of last year's total orders (385 billion won). Considering additional orders in the second half, the value of orders was expected to increase by more than 40% year over year. Since September, ILJIN Electric has secured overseas orders worth 100 billion won over one month.
The global power equipment industry has entered a supercycle as investment in artificial intelligence (AI) data centers expands and aging transmission networks in North America and Europe are replaced. According to market research firm Market.US, the global transformer market is expected to grow from $72 billion (about 105 trillion won) last year to $123 billion (about 180 trillion won) in 2033.