Building Beyond Borders: How Hanjin Steel Pipe Is Expanding Its Global Footprint

In recent years, as the domestic market has become increasingly saturated and competitive, and with the volume of construction projects in decline, it has become essential for Korean companies involved in the construction sector to adopt a global mindset in order to sustain growth. Some observers point out that, on the one hand, construction companies should capitalize on the rising demand for Korean construction technologies, evidenced by overseas orders reaching USD 30 billion in 2024, while on the other hand, construction material manufacturers should diversify their product portfolios and pursue global opportunities to drive growth. From your perspective, how should Korean companies navigate the international market?

I do agree with that assessment. Korean companies, especially in the private sector, are uniquely positioned due to their agility and adaptability. If we categorize the market, we can broadly divide Korean enterprises into large corporations, mid-sized firms, and SMEs.

As you rightly pointed out, domestic demand in Korea has become increasingly limited. This has led large corporations to aggressively pursue export-driven strategies. One illustrative example is in the oil pipe segment, where major companies are actively expanding into international markets.

Meanwhile, SMEs, while nimble, face constraints in terms of production capacity and capital investment. Unlike conglomerates, they lack the infrastructure for large-scale export and have limited room for facility expansion. As a result, SMEs tend to focus on niche markets, developing specialized products that are not easily addressed by larger players. This includes items like high-strength pipes, pipes for automotive applications, and pipes designed for specific or specialized industrial use.

Given the current economic climate, domestic companies have no choice but to look outward. That’s why we are seeing heightened focus on R&D for export-oriented products. However, our industry, particularly steel pipes, is facing intense challenges due to a prolonged economic downturn.

This recession is pushing both conglomerates and SMEs to seek opportunities abroad, especially in sectors like renewable energy, including wind and solar, and traditional markets like oil and gas. Yet, there are hurdles. For SMEs, exporting remains difficult due to limitations in scale and price competitiveness. Compounding this, trade policies, particularly from the United States, have introduced new headwinds. At one point, more than 90% of oil pipe exports went to the U.S., but due to a 50% tariff introduced in August, volumes have dropped significantly.

So in summary, both large and small companies have worked diligently to overcome the recession by diversifying and expanding internationally, but trade restrictions have created new barriers just as progress was being made.

The steel industry has long been characterized by its cyclical nature. Recently, we’ve seen an unprecedented crisis marked by oversupply, falling demand, and narrowing profit margins. Companies have largely responded with three strategies: raising prices where possible, diversifying into new product applications, and cutting production costs through automation and efficiency improvements. How long do you expect this downturn to last?

I believe the downturn began some time ago, but its full impact was masked temporarily by the COVID-19 pandemic. In the Korean domestic market, I think the recession actually started as early as 2018 or 2019. The pandemic, which hit hard in 2020 and persisted for nearly three years, diverted attention from the underlying economic contraction that was already underway.

During this time, growth in the steel industry stagnated. Meanwhile, cost competitiveness, especially when compared with Chinese producers, has been steadily eroding. This is particularly true in the construction-related sectors, where low-cost Chinese imports have severely undercut domestic suppliers.

It’s hard to predict with precision how long the downturn will last, but what I can say is that we’re only now beginning to truly feel its full weight. This downturn is not just cyclical, there are structural issues at play that will require time and strategic transformation to resolve.

In what is your company, Hanjin Steel Pipe, investing for preparing the future amid this turbulence?

About a decade ago, we began investing in automation with the goal of reducing manufacturing costs. While automation has long been established in the U.S. and Europe, where fully automated facilities have been the norm for 15 to 20 years, in Korea, this transformation only began to gain serious momentum within the last 10 years.

Even today, I’d estimate that less than 50% of facilities in Korea are fully automated. One of the reasons Korean firms were slower to adopt automation is because many CEOs didn’t see it as a critical priority. They could remain profitable without significantly reducing production costs, especially in the earlier growth phases of Korea’s economy. But times have changed.

Post-COVID, there’s a noticeable societal shift in Korea towards valuing time and labor more appropriately. This has further emphasized the need for automation, not only to reduce costs but also to create a more sustainable and productive work environment.

Our first priority is the continued investment in automation. But automation alone isn’t enough. True productivity gains come when reducing defect rates. This means leveraging tools like MES (Manufacturing Execution Systems) and investing in employee training to enhance operational efficiency.

Our second priority is increasing exports. We’re actively developing new products tailored for international markets, especially in high-growth areas like octagonal pipes for solar panel structures. Our aim is to raise our export ratio to around 30% of total sales. We were making excellent progress until recent U.S. tariffs disrupted that momentum, particularly in solar and oil pipe segments.

You mentioned earlier that conglomerates have traditionally focused on oil and petrochemical pipes, but in recent years you’ve made strides in the solar energy sector. Looking ahead to 2025 and 2026, do you see continued opportunity in solar, or are you planning to diversify further?

Solar panel installation projects will definitely continue, but the landscape is becoming more complex. Most EPC (Engineering, Procurement, and Construction) firms in the solar space are based in the United States, and the U.S. trade barriers remain significant.

We do expect the solar sector to remain active over the next few years, but penetrating the U.S. market is increasingly difficult due to tariffs and protectionist policies. In Europe, many EPCs prefer Chinese products simply because they’re cheaper, even if they’re not always the highest quality.

So while solar remains a focus, we are certainly exploring diversification, not just in terms of products, but also in terms of target regions.

Since the U.S. market has become more difficult due to tariffs, what other regions are you targeting to help reach your 30% export revenue goal?

We’re currently looking to expand into markets like Australia and Canada. Southeast Asia presents a greater challenge due to intense price competition from Chinese manufacturers, so our focus is more on regions where quality and customization are valued over price alone.

Earlier, you noted that one of the challenges for SMEs is the limited range of companies they can collaborate with or export to. In your expansion into markets like Australia and Canada, are you targeting EPC firms directly, or focusing on establishing distribution networks?

For those markets, we’re mainly targeting real demand channels and distribution partners. In Australia, for instance, we’re exploring opportunities in the blue-collar pipes infrastructure sector, where Korean companies have already made some headway. EPC companies in Australia and Canada operate quite differently than those in Spain or the U.S., so direct EPC partnerships are more limited.

Your company, founded in 1980, was recognized as Korea’s first structural steel pipe manufacturer. With an annual capacity of nearly 400,000 tons and partnerships with leading firms like POSCO, what sets Hanjin apart from other players in the market?

Our most distinctive feature is our manufacturing capacity. We operate 11 production lines, more than any other domestic competitor. While some of the larger conglomerates may have bigger facilities, they typically focus on fewer pipe variations. We produce between 20,000 to 22,000 tons monthly and specialize in a diverse range of pipe sizes, including many that large firms avoid due to inefficiencies.

Secondly, we have a strong domestic network and distribution capability. Our facility in Cheonan is strategically located near the capital region, enabling us to efficiently serve customers across the country. With a 20–25% share of the structural steel pipe market in Korea, we’re recognized for our reliability and responsiveness.

The construction industry is known for its unpredictability; projects can be delayed or accelerated at a moment’s notice. At the same time, producing smaller, high-precision pipes is technically challenging. How does Hanjin manage these dual challenges?

Again, our production flexibility is key. While most competitors operate three to five production lines, our 11-line system allows us to efficiently switch between different product types and volumes. This gives us an edge in managing fluctuating timelines and custom orders.

Interestingly, even major corporations in Korea are now seeking partnerships with smaller firms like ours, recognizing their own limitations in meeting customized, small-batch demands. Some large firms are exploring joint ventures or investment opportunities rather than attempting to develop such capabilities in-house.

Have any foreign firms approached you with partnership proposals, particularly in solar or other niche sectors?

Yes, particularly in the solar EPC space. We’ve received several proposals from international firms seeking to co-develop components or modules. Some of these aren’t strictly related to steel pipes, but rather adjacent components in solar infrastructure. We’re actively pursuing co-development where there’s mutual value.

Hollow Rebars

One of your recent investments is in a new production line for Hollow-Rebar, a product tailored for geotechnical and soil-reinforcement applications. That’s a departure from your traditional structural steel pipes. What was the strategic thinking behind this diversification?

The Hollow-Rebar investment is part of our strategy to focus on high-value-added products. Given the declining demand in traditional segments, we saw a clear opportunity to expand into advanced construction materials. Hollow-Pipes and Hollow-Rebars are designed for very specific use cases and offer superior performance in areas like soil stabilization and infrastructure.

However, these products are not yet ready for mass export. They require further development and testing to replace conventional materials entirely. For now, we’re focused on building domestic market share, but we’ll move into international markets as the product matures.

What are the primary entry barriers in these new sectors, like solar pipes or Hollow-Rebar, that would protect your market position?

There are two primary barriers: first, production complexity and cost. These are not easy products to manufacture profitably without significant expertise and infrastructure. Second, these are project-based solutions, not commodity stock items. That means delivery logistics and customization are critical, and not easily replicated by competitors.

ESG has become a major focus across all industries. Can you share some of the environmental or sustainability initiatives Hanjin is pursuing?

We’ve made ESG a central part of our strategy. On the energy side, we’ve partnered with Hanwha to install rooftop solar panels that now generate about 30–35% of our monthly electricity consumption.

We’re also investing heavily in environmental protection at our facilities, particularly in noise and dust reduction, which directly impact the well-being of our employees and the surrounding community. For a company of our size, I believe we’re ahead of the curve in our commitment to ESG.

Looking ahead 3 to 5 years, how do you see Hanjin evolving? Last year, your revenue was approximately 230 billion KRW, with nearly 30% coming from exports.

Over the next 3 to 5 years, we aim to increase total revenue by 20–30%, reaching around 300–350 billion KRW. While we already lead the domestic market in our segment, we plan to further solidify that position through strategic M&A and supply chain optimization. Internationally, we will continue investing in product development as a foundation for export growth.

Last question, perhaps a bit more personal. By 2030, your company will celebrate its 50th anniversary. What would you like to have achieved by then, both personally and for Hanjin?

In 2022, we reached a peak with 400,000 tons in production and 400 billion KRW in sales. By 2030, I want to normalize that level of performance, not as a peak, but as a sustainable baseline.

We will continue to invest in systems, equipment, and human capital to widen the gap between us and our competitors. And I believe ESG will be a key differentiator. Among companies our size, there are few thinking seriously about long-term environmental and social responsibility. That will set us apart in the years to come.

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