How Aluko Group Plans to Dominate the Automotive Aluminum Extrusion Market

Could you briefly introduce Aluko?

Certainly. Aluko is headquartered in South Korea, but our primary manufacturing facilities are located in Vietnam. We’re also in the process of establishing a factory in North America. In fact, our facility with Global SK is already in place and scheduled to begin operations in June.

Aluko is a rare type of company, even on a global scale, because we provide a true one-stop solution, from initial concept to finished product. We manufacture complete battery components, delivered as ready-to-use modules, and our portfolio spans across televisions, mobile devices, and home appliances. We are the only independent company globally that offers integrated solutions starting from assembly all the way to construction.

We’ve collaborated with numerous leading Japanese companies such as Sony, Panasonic, and Sharp, not to mention major Korean players like Samsung and LG. Our business model is quite unique because we operate independently, not as a subsidiary of a conglomerate.

So, you're not just an OEM, you're offering design and solutions in advance?

Exactly. In addition to our B2B work, we also provide B2C products like window forms. What allows us to be a “small giant” is our technical strength and our ability to deliver end-to-end solutions. Our portfolio is incredibly diverse.

Established in 1956, Aluko Group has grown into a leader in aluminum extrusion and non-ferrous materials in Korea. You’ve supplied materials for iconic buildings like the Sky Dome in Seoul and Two Union Square in Seattle. Today, Aluko is also a major player in the green automotive transition and mobile industries. Could you share some of the most pivotal milestones that shaped the company’s growth?

One of the most important milestones came in 2002, when our current CEO acquired the company and restructured it into the Aluko Group as we know it today. Prior to that, from 1956 to 2001, we were focused purely on construction materials. After 2002, we transitioned into a parts and materials company, an enormous transformation.

Before that shift, we were just another aluminum extrusion company, something many others could do. But post-2002, we specialized and expanded into products that only Aluko can produce.

Our second major milestone was relocating our production facilities to Vietnam. In 2006, we began working with global electronics leaders like Samsung Electronics, Panasonic, Sony, Sharp, and LG Display. While we’ve ended our partnerships with Sony and Sharp since they exited the TV business, we still collaborate with Panasonic today.

When Samsung moved its manufacturing to Vietnam, we followed suit to supply TV and mobile phone parts. Then in 2021, we began developing battery-related products, and more recently in 2024, we launched a new line in ladder production. Another significant milestone this year was our expansion into the United States, where we’re now considering a second factory.

To summarize, our first quantum leap was in 2002, through the M&A. The second was our expansion into Vietnam. And our next leap forward is our growing presence in North America.

Aluminum is inherently eco-friendly due to its recyclability and its role in reducing carbon emissions, and we’re increasingly focused on that aspect of the business.

Could you expand a bit more on what you mean by focusing on the environmental aspect?

As you know, aluminum is highly recyclable. There are two primary ways to produce aluminum, either from virgin ingots or from recycled materials. Recycling significantly reduces carbon emissions, and aluminum is the second-most recycled material after steel.

Producing virgin aluminum is energy-intensive, but recycling uses far less energy. The challenge lies in developing the right technology to recycle aluminum scraps efficiently, and that technology isn’t easy to come by. Fortunately, we have developed our own proprietary recycling technologies, and we’re working to increase both the scale and the ratio of recycled materials we use.

It’s a key area of focus for us, not only from a sustainability standpoint but also as a way to remain competitive in a world that increasingly values environmental responsibility.

You also mentioned that one of your biggest strengths is your ability to manage the entire process, from raw material design to finished parts. How does this integrated structure benefit your clients and set you apart from your competitors?

In aluminum extrusion, mold design is absolutely critical and has been throughout history. But designing and producing molds can be very costly, which is why many extrusion companies outsource that step to specialized firms.

At Aluko, however, we handle everything internally, from mold design and production to heat treatment and surface finishing. Even when we receive highly complex product requests, we can manage the entire process in-house. Other companies often need to consult external mold makers to confirm feasibility. We don’t. That internal capability gives us a strong competitive edge.

In fact, there was a case where we were selected for a project specifically because we could manufacture the battery components entirely within our company.

In Vietnam, we’ve built fully integrated production facilities. Everything, from design and extrusion to heat and surface treatment, is handled internally. This means that when we receive an order, no matter how complicated, we can assess feasibility and carry out the process ourselves. That in-house control is a major strength in our operations.

As Western countries policies are pushing away China-made products and relatively favorized countries like South Korea or Vietnam. Would you say this is a good time for Aluko, to accelerate global expansion, given these geopolitical shifts?

Absolutely. Until around 2010, we manufactured products in Korea and often found ourselves competing in bids against Chinese companies. Back then, we could sometimes win. But now, the cost gap has become too wide. It's no longer viable to compete with Chinese manufacturers while producing in Korea, even with automation. That’s why we, like many other SMEs, have moved our production facilities to Vietnam, where we can remain competitive.

There’s also been a fundamental shift in the global business paradigm. In the past, globalization meant importing and exporting across borders. But now, localization is the trend. Countries are increasingly internalizing production, and this is exactly why we’re seeing more customer orders come through, because we’re positioned locally.

You mentioned “onshoring,” but bringing production back to Korea doesn’t offer much strategic benefit right now.

As for timing, I’d argue that it's no longer a question of "when" to go global, it's a matter of survival. Companies that don’t expand globally won’t be able to sustain themselves. So while the timing is always a consideration, what's more critical is that the current U.S. - China rivalry is creating a window of opportunity for Korean companies to step up and thrive.

The tension between the U.S. and China is blocking many Chinese companies from entering certain markets, especially in the West. This has opened up space for Korean companies operating abroad, particularly in the U.S. and countries like Hungary.

However, for Korean firms that remain focused solely on the domestic or broader Asian markets, the competition is still intense. Chinese companies that are shut out of the U.S. are now concentrating their efforts in these regions, making it harder for us to compete unless we expand globally.

Chinese companies have their strengths, of course. But Korean firms stand out in several key areas: speed of execution, customization capabilities, and the integration of digital technologies. When we compete on a global stage, those qualities give us a significant edge.

Aluko have offices in the U.S. and Hungary, each operating in different languages and cultures. That blurs the line between a "Korean" company and a global one. From your perspective, what do Korean companies philosophy bring to the global market?

At Aluko, we believe that as we expand globally and localize our operations, the more diverse our human and product portfolio becomes, the lower the risk we face. If we had focused solely on batteries, for example, we could have fallen into the so-called “chasm.” But instead, we’ve diversified our offerings extensively. This approach helps us navigate hurdles and seize opportunities across the supply chain.

As a CEO, I firmly believe that the most critical factor is our technological capability. You can develop top-tier technology with enough funding, but true value lies in creating advanced technology that’s also cost-competitive. That’s why we’ve focused heavily on building our patent portfolio, to protect and enhance our unique value.

When we expand abroad, our core philosophy is to offer technology that’s not only advanced but also affordable, allowing us to compete and win on the global stage.

Aluminum touches a vast range of industries. With the rapid growth of the secondary battery market, many companies are diving into thin-film aluminum. But we chose not to pursue that direction. Instead, we focus on areas where we can truly specialize and outperform. Carefully selecting the right product segments is key.

That’s an insightful point, finding your niche while still applying your expertise broadly. Today, around 50% of aluminum parts go into construction and automotive sectors, while the rest are spread across various industries. Could you walk us through the specific opportunities Aluko is pursuing, both internationally and in Korea?

In Korea, we’re primarily focused on the construction materials market. For the U.S., EU, and Vietnam, we concentrate on automotive components, battery parts, TVs, and home appliances. We’re also putting effort into solar module frames, which is a growing sector.

For TV and home appliance parts especially, localization in the U.S. or Hungary is essential. That’s because minimizing tariffs is a priority, so having local production facilities is a strategic move.

What makes us stand out to our global partners is this commitment to onshoring and localization. We often can't finalize contracts unless we can ensure tariff stability. But with our factories already operating in the U.S., this issue is resolved, giving our clients confidence and peace of mind.

While aluminum parts and products are abundant, our strength lies in offering complete solutions, from extrusion to the final product. We manage the entire process, end to end.

I'd like to focus now to your new U.S. project with BlueOval SK. You were awarded a $600 million contract for battery casings. You mentioned earlier that the factory will open in June. Given current geopolitical tensions and tariff-related uncertainties, do you plan to expand the product range at this facility, or will it remain focused solely on battery production for BlueOval SK?

This is just the beginning. With additional investment, we do plan to explore other products and parts, although they will all be related in some way to batteries and battery components. We're also currently in talks with several other companies, but we’re not able to disclose those details at this time.

In terms of future readiness, we’re also integrating AI into our operations. We’ve been collecting extensive data from our Vietnam facilities, studying which configurations are most efficient for producing specific parts. We're in the process of applying AI technologies to optimize every aspect of production.

AI is especially critical when it comes to mold production and the extrusion process. Heat, temperature, and speed are all important variables that need to be precisely controlled. The same goes for anodizing and painting. Once we identify the optimal specifications, we’ll implement AI-driven automation to enhance efficiency and consistency in our U.S. production lines.

What does the timeline for AI integration look like?

Based on the data we’ve gathered from our operations in Vietnam, we plan to implement AI technologies at our U.S. factory within the next two years. Labor costs in the U.S. are significantly higher, so automation through AI is essential to remain cost-effective and competitive.

In the long term, what challenges do you foresee in your U.S. expansion, such as clients diversification or political changes?

Have you seen the Netflix documentary American Factory? It’s about a Chinese automotive company, Fuyao, setting up a factory in the U.S. I watched it, and honestly, it felt very stressful, like I was watching a glimpse of our own future.

To be clear, I’m not really concerned about securing clients. Many companies are already reaching out to us, and we have solid contracts and orders in place. On the business side, we feel secure.

What worries me more is the uncertainty of operating in the U.S., the regulatory complexities, environmental policies, and cultural differences. It's not a specific, defined concern, but more of a general unease. Fortunately, we’ve had a sales office in the U.S. for over 10 years, so we’re not starting from scratch. That gives us a real advantage. I believe that once we begin operating, many of those vague fears will disappear, and we’ll be able to move forward smoothly.

Aluko’s revenue has grown at a CAGR of 6.5% over the past five years, surpassing 600 billion KRW in 2024. This was driven by high-value-added products like EV battery cases, mobile and display frames, solar module frames, and construction materials. With such a diversified portfolio across the U.S., Europe, and Vietnam, where do you see future growth coming from?

Just to clarify, the 600 billion KRW figure represents only Aluko. If we include all companies within the Aluko Group, our total revenue surpasses 1 trillion KRW.

Looking ahead, we plan to further strengthen our presence in both Korea and Vietnam while putting significant focus on expanding in the U.S. As for our core product lineup, we prefer to keep those details confidential for now.

That said, we’re confident about the next five years. We’ve already secured our key clients and orders, we’re not in a position where we need to search for business. Based on our current trajectory, we fully expect to double our sales within the next five years.

Let’s say we come back in a few years for another interview, what would you like to be able to say you’ve accomplished?

I’d like to say, “We told you we’d double our sales in five years, but we actually did it in four.”

What message would you like to leave with readers about your perspective on Aluko’s role in Korea?

Even though Aluko is Korea’s number one aluminum company, we’re still relatively unknown to the general public. Through this article, I hope more people will come to understand who we are and what we do.

We’re not just an aluminum manufacturer, we’re a full-solution provider that covers everything from initial design to the final product. That’s what sets us apart, and we’re putting our full effort into expanding and evolving in this sector.

One reason for our lower public visibility is our name change. For the first 60 years, we operated under the name Dongyang Gangchul. In 2016, on our 60th anniversary, we rebranded as Aluko to better reflect our identity and future direction.

The original name Gangchul means “steel,” which made sense back in 1956 when everything was built with steel. In fact, we started out making desks and panels with it. But in the 1970s and 1980s, Korea began using aluminum, especially in window frames, so we shifted our focus accordingly.

Today, aluminum is our core business, and Aluko represents that evolution. The rest is history.

For more information please visit: https://aluko.co.kr/en/