Expanding Beyond Traditional Valve Market to Lead in Semiconductor, Hydrogen and Renewable Energy

For many exporters, now seems to be an ideal time for Korean companies to capitalize on global supply chain realignments. Korean corporations are accelerating the relocation of their factories overseas, and foreign policies are encouraging major international corporations to rethink their supply chain networks in favor of partnerships with friendly countries. Do you agree with this sentiment? What are the challenges and opportunities for Korean suppliers within global supply chains?

Last year was a period of significant growth for our company, with notable increases in both sales and exports. However, we recognized that we couldn't afford to rest on our laurels and decided to expand overseas. The domestic market has its limits, and given its volatility, we saw opportunities in international markets, particularly in the United States, Southeast Asia, and Middle East, where the energy sector holds strong potential.

Last year, we participated in Gastech, a Hydrogen, LNG exhibition in Houston, Texas, and found it to be a vital step toward building a competitive edge against other markets, especially China.

Expanding our global network has been a priority and attending exhibitions in other countries such as France was a great opportunity for us to engage with many German and French clients and host meaningful discussions with over 200 attendees. Next year, we plan to participate in Gastech again and in another exhibition in Milan, Italy. Additionally, we are collaborating with KOTRA, leveraging their global branch network to strengthen our international presence further.

Marketing remains a challenge for us. Our primary channels include exhibitions and agents who arrange meetings with companies from other countries. This interview with Newsweek is an invaluable opportunity, as your platform offers broad exposure across key sectors. While marketing incurs costs, we believe that investing in opportunities like these is essential for growth. We’ve also considered exploring other channels, such as social media platforms like Instagram, and even hiring dedicated marketing professionals. Marketing is a vital aspect of our strategy, and we view this collaboration as one of our most promising opportunities yet.

As the company operates across a wide range of markets and sectors, where are you focusing most of your investment today? Where do you anticipate future growth and market share expansion?

Currently, there is a significant demand for high-performance valves in sectors like hydrogen, semiconductors, and the chemical industry. One notable global leader in this space is Descote, the world’s number one valve company. Their valves are indispensable in facilities handling toxic gases, ensuring safety in highly sensitive processes. We have been distributing those valves in Korea for 30 years, serving conglomerates such as LG and OCI, who exclusively request these valves for processes involving highly toxic gases.

These products, including valves for gases like CFC and NF3 used in semiconductor processes, as well as bellows-sealed valves for hydrogen facilities, are in high demand. These valves are also crucial in reducing carbon emissions by blocking oxygen exposure. However, Descote valves are very expensive. This is where we add value—we offer competitively priced alternatives while maintaining exceptional quality, distributed Maker Valve for the proper process line, making us the leading valve company in Korea. This positions us strongly within the chemical industry.

In the secondary battery industry, the manufacturing of cathodes and anodes involves the use of acids to dissolve metals and remove impurities, which generates large amounts of toxic gases. Bellows-sealed valves are critical in managing these processes effectively. These valves are valued at 120,000 to 130,000 KRW per kilogram, further underscoring their importance.

Looking ahead, we see substantial opportunities in the semiconductor, chemical, and hydrogen industries. These sectors align with our expertise, and we are strategically positioning ourselves to capture a growing share of these markets.

MOV Valve

One of Flowone’s defining strengths is its long history of collaboration with domestic and international companies. Could you elaborate on what makes Flowone unique and highlight the features that give you a competitive edge both in Korea and abroad?

Korea's strong relationships with both the United States and China provide a significant competitive advantage, and we are strategically leveraging this. We have a key partner in China whose factory spans an impressive 1.65 million square meters and employs 3,800 people. This facility is fully automated with over 8,000 AI-driven pieces of equipment. Our Chinese partner has been supplying the U.S. market for over a year, proving their ability to meet global standards.

What sets us apart is our balanced approach to manufacturing: cost-effective products are produced in China, while high-end valves, such as bellows-sealed valves, are manufactured in the U.S. or Europe. We position ourselves in the mid-range segment, where there is significant demand. Our strategy involves importing parts from abroad and assembling the final products in Korea.

Unlike others, we are transparent about sourcing materials from China. We actively recommend Chinese materials to clients seeking cost competitiveness, while guaranteeing high-quality outcomes. One of our strengths lies in our highly skilled workforce. Though our company is relatively young at 21 years, many of our professionals boast over 15 years of industry experience, enabling us to expertly manage imported materials and deliver superior results.

Additionally, we use Witzenmann bellows seals, widely recognized as the best in the world. The Hastelloy bellows seals we use, sourced from Witzenmann, cost approximately 150,000 KRW per kilogram. Despite the expense, we maintain an inventory to benefit from economies of scale. For instance, while German bellows seals perform ten times better than their Korean counterparts, we cannot sustain business by charging clients ten times more. Instead, we purchase these seals in bulk, negotiate discounts with Witzenmann, and pass on the savings to our clients, making premium quality more accessible.

You mentioned your intention to diversify and expand into industries such as semiconductors, hydrogen, and chemicals, which demand stringent quality standards. How do you address the challenges of competing on price against established products, and how much market share do you anticipate capturing in these sectors?

While we remain optimistic and ambitious—hoping to capture as much market share as possible—it’s important to acknowledge the realities of these highly competitive markets. The oil, gas, and hydrogen sectors are dominated by established players, particularly German, Italian, and U.S. vendors.

We are in the process of breaking into these markets, knocking on the door, so to speak. However, it’s still early to predict how much market share we can secure. Our focus for now is on establishing a foothold, demonstrating our capabilities, and building trust with potential clients. Once we do, we’re confident that our commitment to quality, price competitiveness, and innovative solutions will help us grow steadily in these industries.

How important are partnerships with players in this field for your market penetration strategy? What types of partners are you seeking?

Partnerships are crucial for our growth and market penetration. We aim to establish agency contracts with companies in Saudi Arabia, a hub for petrochemical and oil and gas industries. Building strong relationships with these companies is a priority, and we are currently in negotiations to finalize agreements. These partnerships will help us strengthen our position in the region and tap into its vast potential.

In 2023, Flowone achieved significant growth, with revenue more than doubling to 111 billion KRW and an operating profit margin of 8.3%. Looking ahead to the next three to five years, which of your technologies do you see driving growth, and which markets will these technologies impact?

While 2025 may be a challenging year, we anticipate significant growth beginning in the second half of 2025 and into 2026, with revenue projections exceeding 200 billion KRW. Global events, such as the resolution of the Russia-Ukraine war and potential shifts in U.S. policies, including second term for Trump, could lead to substantial changes in the market landscape.

We are actively working with Russian companies to obtain quality certifications, positioning ourselves to enter the Russian market once conditions stabilize. Korean conglomerates like Hyundai Engineering and Daewoo E&C are already securing large-scale contracts worth 4 trillion KRW, and we aim to capture 10% of that business.

Additionally, Southeast Asia offers untapped opportunities, particularly in renewable energy and photovoltaic power plants in Malaysia and Indonesia. Despite a sluggish domestic oil and gas market, we foresee significant growth in overseas markets, especially in Ukraine and the Middle East, which are poised for a resurgence.

We are also working with major players like Samsung and SK Hynix in the semiconductor market, while the domestic fine chemical industry continues to expand, presenting further opportunities. One of our greatest strengths is our extensive experience—I’ve been in this industry for over 30 years—and our well-established domestic and international partnerships. While manufacturing is critical, sales and relationship-building are equally vital for sustainable growth.

In addition, we have supplied TITANIUM VALVES for the shipbuilding and marine sectors, such as EXXON MOBIL and WOOD SIDE, through existing MODEC, and based on this, we will actively enter the domestic shipbuilding and marine and marine platform markets.

This year, our revenue is expected to reach 70 billion KRW. We project 100 billion KRW in 2025 and aim for 200 billion KRW by 2026.

Busan Factory

You mentioned challenges in the petrochemical industry. Could you elaborate on the current situation and its impact on your business strategy?

The petrochemical industry is undoubtedly facing tough times. For example, in Vung Tau, Vietnam, Siam Group from Thailand recently built an NCC (naphtha cracking center) factory, but it ceased operations just one week after starting due to market difficulties. Similarly, major Korean conglomerates like Lotte, LG, and Hanwha are struggling with their NCC facilities, many of which are nearing shutdown. LG, for instance, is looking to sell 40% of its shares in a petrochemical company to a foreign partner.

Despite these challenges, we believe this market will eventually rebound. For now, we are focusing on diversifying our portfolio and tapping into other high-growth sectors such as semiconductors, hydrogen, and renewable energy.

In one or two sentences, what would you like readers to take away from this report?

This interview is an excellent opportunity to increase our global visibility. I have a suggestion: organizing a roundtable or forum for all the CEOs you've interviewed would be a fantastic platform for knowledge exchange and mutual promotion.

As for Flowone, we have a diverse portfolio and over 30 years of expertise in the valve industry. We pride ourselves on being a highly competent and capable in the petrochemical, semiconductor, gas, secondary battery and marine industries. I hope readers remember Flowone as a leader in this field with a deep commitment to quality and innovation.

For more information please visit: http://www.flowone.co.kr/