Buhmwoo enhances machining efficiency and tool life with long-lasting, precision-engineered cutting and grinding oils designed for demanding metalworking environments.
The metalworking fluids market is at a turning point. In 2024, the manufacturing of automotive parts accounted for roughly 43 percent of global demand; however, as the shift toward electric vehicles reduces the number of components required, other segments are becoming more attractive. From your perspective, how will this shift affect your company, and which areas do you see as offering the greatest growth potential?
What you mentioned has been happening for about ten years already. We prepared in our own way, because we expected the metalworking fluids market would change at a very fast pace. So we focused heavily on risk management.
Fortunately, the EV market’s pace has adjusted somewhat. As electric vehicles gained traction, the speed of decline in internal combustion engines has eased a bit. Hybrid vehicles are selling in parallel, so the transition is not happening in a single straight line.
What we prepared, starting about ten years ago, was to begin investing in chemical products used in electric vehicles. I cannot share the details in depth, but in brief, cars are becoming less like purely mechanical machines and more like electronic products.
So we are focusing on chemicals used for sensors inside the vehicle, coatings used in those areas, and chemicals related to thermal management systems, including materials that help manage heat and heat dissipation. Some of these chemical solutions are already developed, and some are still in development.
Essentially, our approach is to strengthen new areas. One example, and I will keep it at this level, is expanding into ESG-related business areas such as resource recycling and recycling in the broader sense. We are expanding our business portfolio in those directions.
So we have begun to manage risk more proactively. And, fortunately, we can benefit from what I would call an EV market effect, partly because fuel cell costs have started to decline. And this is connected to the hybrid market, the growth of hybrid vehicle business.
International competitors often focus on expanding their existing portfolios. The difference for us is that we are strengthening new sectors and opening new opportunities through those sectors. For example, we are expanding our ESG-related portfolio. That is a key point of differentiation.
As global giants such as Total and Shell, along with large specialized companies like Valvoline, dominate the market, mid-sized players face increasing pressure and typically adopt two main differentiation strategies. On the one hand, they develop specialized chemical solutions for niche applications, often aligned with sustainability trends. On the other hand, they expand their regional footprint to reduce dependence on any single country. In this competitive landscape, how do you differentiate yourself?
Using the domestic Korean market as an example, metalworking fluids are a highly specialized sector, and we have been operating in this field for 53 years.
That is why large domestic companies such as Hyundai Oilbank, GS, and SK have difficulty entering this space. The reason is that the sector requires very deep customer-specific design.
If I compare it to food, you can think of us as a three-star restaurant. We are not like mass-produced factory food, like ready-made products that are stamped out at scale. We are more like top-level chefs. That is because each customer, like each diner, has a different taste and set of preferences.
Even when customers have similar factories, their requirements differ.
For example, even if it is aluminum machining, one customer may want extremely smooth machining performance after processing. Another customer may want lower fluid consumption. Another customer may want to prevent discoloration. There are many different requirements, and our advantage as an SME is that we develop and design customized solutions for each customer’s needs.
Second point, Korea is globally known for its speed. The speed of response is likely a key differentiator, both against large corporations and as a defining strength of Korean SMEs.
We participate in a different sector, and we can design solutions for customers even in competition with large global companies. Compared to other foreign companies, we respond very quickly to customer needs and requirements. Meanwhile, large domestic players like Hyundai Oilbank, GS, and SK find it difficult to develop in our sector.
Is there a particular market outside Korea where the ability to rapidly customize tailored solutions becomes a particularly strong advantage?
Let me talk about India. In India, we have what we call TS, meaning Technical Support. We have strengthened staffing in that area.
In the Indian market, awareness of Buhmwoo products is still not high. But customers recognize that our quality is strong and our response is fast. That is very much a Korean style.
We use local technical personnel to provide fast troubleshooting. When a problem occurs, we quickly go to the site, provide a solution, and support the customer. This seems to differentiate us from companies like Fuchs or Castrol.
Of course, we design customized products, but in reality, our products are not the kind of thing where you deliver them once and then no service is needed. Continuous after-service is necessary.
For example, it is like a water purifier. You sell the purifier, and then you keep replacing filters and managing water quality. In a similar way, our service is ongoing. We have strengthened that capability, and it creates differentiation.
Founded in 1973 and now part of the Global Buhmwoo, Buhmwoo Chemical Industry has held roughly half of the domestic market, supplying major customers such as POSCO and Hyundai and Kia, and has played a significant role in improving processing efficiency in Korea. From your perspective, what is Buhmwoo Chemical Industry’s unique growth story—from its beginnings as a regional lubricant specialist to its evolution into a global company with multiple overseas entities?
The key moment for us was in 1983. When POSCO began massive investment to build steelmaking facilities domestically, using a domestically produced rolling oil was considered unrealistic. Equipment was imported from Germany or Japan, and the facilities were extremely expensive.
But our previous chairman saw an opportunity and invested in rolling oil production. The risk was enormous. If we failed, it could have been enough to force the company to close. Nonetheless, we carried out Korea’s first localization of rolling oil. That was probably our core growth engine.
After that, we developed new rolling oils and rust preventives for Hyundai Motor and many other companies, using our own independent Korean technology. This historical background is something our employees are especially proud of, and it continues to drive us forward today.
Among Korean companies, very few have truly maintained a Korean brand identity in this industry, as it is often easier to operate under foreign brand names and structures. Growing under our own Korean brand is therefore a major source of pride and one of our greatest strengths.
Today, our challenge is to build on this foundation and expand internationally. The trigger for our initial overseas expansion was the global expansion of Hyundai, Kia, and Samsung, we essentially followed our major customers abroad. Not every market proved successful, and we experienced setbacks in some countries, but we reassessed our strategy and continued moving forward.
In the past, we established our global foothold by accompanying large conglomerates. Today, even when these conglomerates do not move first, we take the initiative ourselves, with plans to expand into ASEAN markets including Thailand and the Philippines, as well as Mexico and Brazil.
When approaching Asian markets and North American markets, how will you apply different strategies across regions?
Broadly speaking, we pursue two main strategic directions. One is a premium, high-quality positioning for mature markets. The other is a highly practical, cost-competitive product offering for emerging markets.
In Europe, for example, we need to compete with high-quality, premium products. In emerging economies such as India, Mexico, and Brazil, markets that resemble Korea roughly 30 years ago, we take a more comprehensive, total-solution approach.
Because each country has different sanctions, regulatory conditions, and operating environments, the supply of auxiliary materials such as metalworking fluids can be smooth in some markets and more challenging in others. Where auxiliary supply is not reliable, we do not limit ourselves to selling metalworking fluids. Instead, we also provide related supplies, including machining tools and equipment, which we procure and supply directly to our customers—for example, in Mexico.
In other cases, such as India, customers may lack proper fluid management systems due to lower workforce skill levels. In these situations, we sometimes hire local staff and manage fluids directly on behalf of our customers. We refer to this approach as CMS (Coolant Management System).
Let’s look at these approaches separately. In emerging markets, are you seeking to expand your local network of suppliers and partners to strengthen your positioning and offering?
To mitigate political risks, sanctions, and other uncertainties, many large companies enter markets such as India, China, or Indonesia through joint ventures. For each of our target regions, we adopt a tailored approach based on local conditions, but overall, our strategy is to collaborate through joint ventures while also developing new distributor networks.
At present, we have operational bases in China, Vietnam, and India, as well as a warehouse in Indonesia. All other regions where we have not yet expanded remain potential targets. Our first step is to identify reliable distributors and establish a baseline market presence. From there, we determine whether to establish a local subsidiary or form a joint venture as the next stage of expansion.
If I name some countries of interest, first is Thailand, then Singapore, the Middle East, Brazil, and parts of Europe. Slovakia or the Czech Republic, for example, are countries where we have not developed our presence at all yet.
How are you strengthening your brand positioning in these markets?
This is the most difficult issue. For SMEs, and especially for Korean brands, it is one of the hardest challenges.
In the end, we need a differentiated strategy, and customers need to use our products and feel for themselves that the quality is truly good. But because the geography is huge, brand awareness varies dramatically by region.
Even within India, although we have achieved some level of recognition in the Chennai region, in other areas we remain largely unknown. As a result, we are placing strong emphasis on strengthening our global marketing efforts.
Are there specific products that best reflect your advanced technological expertise but still lack market recognition?
We can start with our cutting and grinding oil, which is currently supplied to Tesla. One of the key reasons for its success is its durability.
We have also synthetic cutting oils products, one of our flagship products is what we call a “transparent type” cutting oil. If you compare it to cosmetics, it is not an emulsion-lotion type, but closer to a clear skin-lotion type. It is a transparent cutting oil type that has become a global trend.
Globally, even in our overseas business, we hear that Buhmwoo’s product is considered the best in that category. However, promotion has not been strong enough, so it is not as widely known as it should be.
Buhmwoo has been making strong efforts in environmental areas, such as removing carcinogenic substances from rolling oils and pursuing ESG initiatives including factory waste reduction and resource recycling. As regions such as Europe adopt stricter regulatory environments, what additional developments and initiatives are you implementing to further reduce environmental impact, and how do these efforts support your customers’ own sustainability goals?
ESG-related actions in our chemical business are not focused on dramatic, one-off initiatives. Rather, Buhmwoo is developing cleaning oils and energy-efficient cleaning solutions, while also ensuring that our raw materials move in an increasingly ESG-compliant direction. More importantly, instead of focusing solely on our internal efforts, we aim to produce products that enable our customer companies to meet their own ESG requirements. In this sense, our role is to support the sustainability strategies pursued by large industrial players through thoughtful product design and practical solutions.
Global Buhmwoo is made up of several specialized companies. Your sister company, Buhmwoo, focuses primarily on steel-related products; Bex-Inter Corporation operates a license-based B2C lubricants business; and BIT is dedicated to research. How do you foster synergies among these affiliates?
We refer to this structure as the “Buhmwoo Alliance.” At a high level, the group consists of a research institute, an affiliate focused on raw-material manufacturing, and operating companies that bring products to market.
Each entity has a clearly differentiated role. BIT, the Buhmwoo Research Institute, is responsible for developing proprietary and differentiated technologies. Kwangwoo serves as our in-house raw-material manufacturing affiliate, producing materials based on those technologies. This structure helps minimize supply-chain risk by allowing us to manufacture core raw materials internally and supply them to affiliates such as Buhmwoo Chemical for finished-product manufacturing.
Buhmwoo Chemical and other B2B-focused affiliates concentrate on producing industrial products and delivering the technological capabilities that drive B2B growth. Meanwhile, Bex-Inter Corporation takes selected technologies and products and expands them into the B2C space, translating industrial expertise into consumer-oriented offerings where appropriate.
This is how we have structured the group—by separating roles across specialized affiliates with clear responsibilities. As a result, we are able to maintain speed and flexibility. Despite having a broad product portfolio and a large customer base, our decision-making and execution remain fast, allowing us to respond to customer needs in ways that many competitors cannot.
We have covered many valuable points. In 2024, you achieved KRW 14.4 billion, and 12 percent CAGR over the past four years. This is a very healthy, growing company. What will be the key drivers over the next three to five years?
I will essentially provide the final summary of our conversation today.
Our core industry is closely tied to the automotive sector. But we do not know whether the EV transition will accelerate or slow down, therefore we must develop products optimized for that direction.
For example, we need products optimized for battery case forming processes and metalworking fluids for machining motor components and related manufacturing processes. That is one key factor.
Second, to become a true global company, we must establish localization very clearly and completely. As I mentioned earlier, this also links to joint venture strategies and partner strategies, but the core point is robust localization by market.
Third, we must digitalize our fluid management system and become a company that can provide a total solution to customers. In other words, we want to provide a fully integrated solution, supported by digital systems, as part of our customer value proposition.
So, three major priorities: EV-optimized product development, complete localization for global expansion, and digitalization of fluid management systems to provide total solutions.
A more personal question: if we were to meet again in five years, what goals and targets would you hope to have achieved by then?
I would like to mention the goal of Global Buhmwoo as a whole. Right now, Global Buhmwoo’s revenue is around KRW 500 billion. If you come back in five years, I believe we will surpass KRW 1 trillion. That is the goal we want to achieve.
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