"If the Building Act changes, the underground parking lot insulation market will end up shifting to conglomerate products. Small and midsize companies like ours will lose the market itself."
On the 24th of last month, we visited A, a small and midsize insulation manufacturer in Hwaseong, Gyeonggi Province. Inside the plant, insulation for apartment underground parking lot ceilings was being produced nonstop, but the mood on site was heavy.
The head of this company, which has produced insulation for nearly 40 years, let out a deep sigh as the person looked at the production line. The person said, "We invested for years in research and development (R&D) to align with the government's fire safety strengthening policy and even obtained certification," and added, "If we are now told to use a different material, it is no different from telling us to shut down the plant."
With the revision of the Building Act, concerns are growing that the market for insulation used in building underground parking lots, which small and midsize companies have focused on, could be reorganized around conglomerates. While there is agreement with the policy's intent to strengthen fire safety, the amendment sets use restrictions based on the insulation's material rather than its fire performance, a "material-centered regulation" that critics say threatens the survival of hundreds of small and midsize companies.
◇ Concern over the underground parking lot insulation market being reshaped from "SMEs → conglomerates"
The Land Infrastructure and Transport Committee of the National Assembly voted in April to approve a partial amendment to the Building Act mandating the use of noncombustible materials for insulation in underground parking lots of buildings. After a string of large fires at multifamily housing and logistics facilities, the move aims to prevent fire spread and improve building safety.
Yeom Tae-young, a lawmaker with the Democratic Party of Korea who spearheaded the bill, stresses it is an unavoidable institutional improvement for public safety. An aide in the lawmaker's office said, "We are not trying to change all buildings, but to strengthen safety standards starting with underground parking lots, where fire risk is high," adding, "The bill also includes a two-year grace period."
Small and midsize insulation manufacturers, on the other hand, worry that after the law takes effect, the market could, in practice, be reorganized around conglomerates. About 900 small and midsize companies, including related fields, are participating in the underground parking lot insulation market, where organic insulation dominates. By contrast, the noncombustible inorganic insulation market is led by some conglomerates such as KCC(002380) and Byucksan(007210).
The small and midsize business community in particular argues that the R&D carried out in reliance on government policy could become meaningless. Since the mid-to-late 2010s, the government has gradually strengthened the building material quality recognition system, quasi-noncombustible performance standards, and full-scale fire tests. In line with this, small and midsize companies invested hundreds of millions of won to develop quasi-noncombustible organic insulation and also obtained government certification.
Industry officials also note that the recent underground parking lot fires in question occurred in existing insulation installed before the institutional strengthening, so it is not reasonable to regulate today's high-performance products under the same standard.
The head of a small and midsize insulation manufacturer in Gwangju said, "It is hard to accept being told to simply change the material, treating the products developed to meet the strengthened standards and those that were vulnerable to fires in the past as the same," adding, "If products that have been validated for performance are uniformly excluded, not only the years of technological development but also the competitiveness of domestic small and midsize companies could be undermined."
Small and midsize companies that make pipe insulation, which were excluded from the scope of this amendment, also cannot hide their unease. Kim Yun-ok, executive director of the Korea Foamed Polyethylene Insulation Cooperative, said, "If the regulations expand to insulation in the future, there is a high possibility that Chinese or conglomerate products, backed by price competitiveness, will dominate the market."
◇ "Design the system around actual fire performance, not material"
Experts agree on the need to strengthen fire safety but emphasize that the regulatory approach should be revisited. They are particularly concerned that it leans toward "material-centered regulation." Rather than a dichotomy that organic is dangerous and inorganic is safe, they say evaluation should be based on actual performance in fires.
Global building safety standards are also evolving toward comprehensively evaluating a building's actual fire performance rather than uniformly restricting specific materials.
Japan once operated material-centered regulations similar to Korea's in the past but now applies a performance-based system under the Building Standards Act that comprehensively evaluates fire spread time, heat release rate, and available safe egress time. The United States also evaluates building fire safety through full-scale fire tests of assemblies such as wall systems, rather than individual materials, under the International Building Code (IBC).
Wang Nam-ung, deputy director of the Korea Institute of Civil Engineering and Building Fire Research, said, "We need to comprehensively evaluate not just a single specific material, but the entire building's fire safety system and actual performance," adding, "It is also important to create conditions that allow related companies to pursue continuous technological development and performance improvements."