SEOUL, KOREA — Year 2012 marks the 17th year since Public Procurement Service initiated the Excellent Procurement Goods Designation Program. Since 1996, the PPS’ administrator has selected products with remarkable performance, technology, and quality, in an effort to improve product quality of procured goods as well as providing small, medium, and venture businesses with an expanded sales route. Once designated as Excellent Procurement Goods, the products are guaranteed as a sales contract according to the National Contract Law, and are subsequently supplied to relevant agencies on various levels. So far, this program has expanded markets for many businesses by means of a preferred purchase system that includes an optional contract. For instance, in addition to fostering a wide range of promising small and medium businesses, the program clearly induces technological development. Sales of the companies in general also grow drastically after the designation: barring the difference among products. The annual sale, on average, increases by 57 percent.
PPS at present estimates the overseas procurement market to be larger than USD 2 trillion (KRW 2,200 trillion), which is over 20 times bigger than Korea’s annual public procurement market (KRW 104 trillion). The US procurement market, which has been additionally opened by Korea-U.S FTA, is also estimated to be around USD 6 billion (KRW 6 trillion). Given the situation, “PPS will develop Korea Public Procurement Expo (KOPPEX) as an international event and a platform for Korea’s excellent small, medium, and venture businesses to advance to world markets,” Choi Kyu-yun, administrator of PPS, said.
In 2012 KOPPEX gathered domestic companies that will undoubtedly prove competent in international markets: such as Retech (multi-purpose special vehicles); Autech Corporation (medical welfare special vehicles); Daejin Kostal Co., LTD (document shredder); and Wood Metal Co. (nonflammable partition) whose operation encompasses America, South East Asia, Africa as well as Europe.
Retech – multi-purpose road management vehicle
Established in 1994, Retech (www.retech.kr) is now supplying 80 percent of snow removal equipment in Korea, despite their relatively small size. The company chose a special approach for the Korean market as the expensive imported machines had often been inconvenient to use because of Korea’s particular environment with four distinct seasons and land, 70 percent of which are covered by hills. After focusing on developing products that suit such unique characteristics, Retech received PPS Good Product Certificate in 2000 for the first time, with the snow removal machine which has been developed solely with the domestic technology. In 2002, the company developed and started manufacturing a multi-purpose road management vehicle that can be used throughout the year. As a result, Retech was awarded with the Minister of Knowledge Economy Prize on this year’s Commerce and Industry Day.
“We were able to achieve these positive results in a relatively short period, thanks to the research center of the company,” said an employee of Retech. He adds that “even during hard times, the company’s management spared no expense in research and development.” Retech’s multi-purpose road management vehicle can be used for various purposes such as snow removal and road cleaning. It can clear snow using hydraulic pressure by attaching a snow plow on the front, and also spraying potassium chloride when attached with a rear applicator based on the road sensor. Installing a water tank even enables the vehicle to clean the road with high-pressure water. It is used by 80 percent of the local governments now, while becoming increasingly popular in Russia and China, etc. Retech is planning to enter the New Zealand and European markets as well in the near future.
Autech Corporation (www.autech.co.kr), a company specializing in special-purpose vehicles for the disabled and the elderly, is gearing up for global management this year by starting to expand its overseas sales network. With only 12 years since its foundation, the company has become the top supplier of the special vehicle market in Korea, which includes refrigerated/freezer vans, ambulances, and lifts for the disabled.
This year, Autech has set a goal to attain KRW 410 billion of sales and KRW 40 billion of operating profit with the largest market share in Korea – and at least KRW 50 billion of it, the company hopes, will come from exports. They first entered a foreign market in 2008 when the company exported 14 models of medical examination vehicles to Iraq, and, the same year, was awarded the Silver Tower Order of Industrial Service Merit in the new technology section.
Autech’s rapid growth, which enabled the company’s merger and acquisition of Carrier Air Conditioner last year, was prompted by the fact that their paramedic ambulance, multi-purpose firefighting pump vehicle, etc. have been selected as PPS’ Excellent Procurement Goods since 2001, just a year after the business was established. The paramedic ambulance is equipped with air suspension units, which prevents the patients from having an accident. The vehicle is praised as an optimal system for quick and safe emergency medicine and transportation, as it was designed for use in narrow roads and hilly areas.
The rising attention for the rights of the disabled movement also adds to the company’s optimistic expectation for sales growth in the welfare vehicle field. Autech is in fact the sole supplier of taxis for the disabled for the Seoul City’s program. With the full lineup that facilitates transportation of the disabled and the elderly, Autech’s widely-recognized technology led to sponsoring the production of the Olympic Committee bus (in lift or slope) for Pyeongchang as the city made a bid for the 2018 Winter Olympics.
Daejin Kostal – Paper Shredder
Daejin Kostal Co., LTD. (www.djkostal.co.kr) is a small, yet strong, global producer of paper shredders. The company has focused only on paper shredders for 38 years since it was established in 1972. Its world-class technological power has dominated the domestic market, and are now competing with German manufacturers in the US and Japan.
Daejin Kostal’s products are often said to have much better performance than those of other well-known companies from more developed countries. The company proudly occupies 70 percent of the domestic market, and has entered the Japanese market 10 years ago. Recently, they succeeded in developing the world’s first special shredder that destroys confidential documents into ‘particles’ that are 1mm x 1mm or 1mm x 5mm in size. The product has passed the rigorous criteria of the US National Security Agency and Russia, and now is exported to the US procurement market and Russia -- by 2008, only three German companies managed to meet NSA’s standards. Daejin Kostal signed a USD 10-million contract last year with an American buyer for the first export order.
What is preventing the rivals from keeping up with the company For many years, Daejin Kostal’s has developed outstanding technology produced by decades of quality improvement and technological know-how. The model certified as a Good Product by PPS in December 2012 and as a New Excellent Technology by Ministry of Knowledge Economy, in particular, is recognized for having better performance than German paper shredders.
The key technology of paper shredders is to prevent the shredded material (chips) from being stuck on the blades and also from reducing the shredding rates even after a long operation. Daejin Kostal’s super cleaning feature and state-of-art gear power transmission minimizes materials like powder, generated from shredded papers, gathering at the blades and, therefore, enables consistent shredding. The remarkable durability comes from the metal cutter guide that facilitates insertion and discharge of papers. Damage and noise by overload was also prevented. This efficient shredder can not only destroy a large volume of papers simultaneously, but it also has a special opening for CDs and DVDs so that the papers and plastics can be separately managed.
Wood Metal – Nonflammable Partition
At this year’s event, the office furniture manufacturer Wood Metal Co. (www.woodmetal.co.kr) caught visitors’ attention with its nonflammable partitions based on heat-resistant resin. Normal office partitions are made of chemical fiber, which is susceptible to fire and emits inflammable substance or toxic gas when burning. However, Wood Metal’s product is based on heat-resistant resin and aluminum so that, when there is fire, it delays ignition and minimizes toxic gas emission to prevent serious damage to people. It has even been certified as an environmentally-friendly product.
This does not mean the company compromised the design: the partition adopted different colors to create a bright atmosphere in the offices and a white board as an additional feature. Unlike conventional partitions, the product can be manufactured by factory assembly lines, which in turn enables the company to provide it at a reasonable price to consumers.
Set up in 1988, Wood Metal has been manufacturing office furniture, especially environmentally-friendly products for green offices. The company has been actively promoting export since 2000, after being selected for the PPS’ multiple award schedule (MAS) and excellent product program.
They have been registered as a global supplier of the US public procurement service, which was part of their strategy to enter the US public market, and are now supplying office furniture to US military bases in Korea. Furthermore, there is a Wood Metal branch in Oman the company is also planning to build a local office in Saudi Arabia as well. Wood Metal has high hopes for this year’s KOPPEX as Seong Mun-gi, the executive director who attended the event, said, “Being selected as an Excellent Procurement Good has helped us establish ourselves in the overseas market.”