Techcross fosters innovation in BWMS to support a cleaner shipping industry

With over 10 years of experience in global exports, what were the challenges and opportunities Techcross faced when entering international markets and competing against global players?

Techcross has focused on overseas markets from the beginning. The Ballast Water Treatment System was developed and mandated by the International Maritime Organization (IMO) to protect the oceans from cross-contamination. As such, the primary decision-makers for adopting this system were shipowners, many of whom are based in countries like Greece, Germany, the UK, Japan, and China, in addition to Korea.

From the outset, we had to approach and address these international stakeholders directly, which shaped our business to be globally oriented. More recently, as the retrofitting market for existing vessels has become fully saturated, our market focus has shifted to new shipbuilding projects. This shift began about five years ago, and today the retrofitting door is nearly closed.

Even when selling to shipyards for new builds, we still require the support and influence of shipowners. Without their backing, all shipyards tend to recommend their “Maker Listed” equipment as standard choice. Therefore, strong support from shipowners remains critical. Although our current operations focus on destinations like China, Korea, and Japan, the actual influencers continue to be international shipowners. Maintaining their influence is essential—it’s essentially our lifeline for persuading our equipment over competitor  and staying competitive.

What are the key factors that influence a shipowner to select Techcross over  alternative technology?

This question touches on what has driven Techcross’s success. Initially, we were a first mover in the market. There were no other reliable producers offering this type of solution, so we had the advantage of entering early. Although some shipowners did try other manufacturers, over time, our products proved to be reliable, and Techcross established a reputation as a trustworthy partner.

Our early success came from several factors: being a first mover, delivering reliable technology, and providing strong post-installation service and maintenance. This product is designed to last 20 to 25 years, the lifespan of a vessel. Naturally, problems or malfunctions arise over such a long operational period. Whenever issues emerged, Techcross was the most agile in identifying and resolving them. This commitment gave shipowners peace of mind and strengthened their preference for our solutions.

After about four to five years, the market became more crowded, shifting toward price competition. However, because we entered early, we had already refined our performance and reduced material and maintenance costs ahead of our competitors. This allowed us to remain competitive even on pricing. To this day, no competitor has surpassed us in market share—we have always maintained the number one position.

The key drivers behind this success have been early market entry, technological excellence, and exceptional after-sales service.

Techcross factory

How has Techcross managed to continuously improve performance and reduce costs over time?

This is a critical aspect of our success. Many companies in this industry rely on a variety of components from different manufacturers—pumps, control PCs, electrodes, power supplies, and so on. Techcross initially operated this way, focusing solely on our core competence in electrodes.

However, we soon realized that relying on external suppliers limited our ability to control our own destiny. We had to develop our own technology to ensure continuous improvement and cost reduction. Today, Techcross not only manufactures electrodes but also produces control PCs, power supply systems, critical sensor mechanisms, and key valves and pumps.

This vertical integration strategy allows us to control costs, maintain high quality, and stabilize our supply chain. It also shields us from market disruptions. For example, about three to four years ago, there was a severe semiconductor shortage. In extreme cases, chips that previously cost $0.10 suddenly spiked to $20, with lead times stretching to six months. That experience reinforced the importance of self-reliance.

We continue to pursue vertical integration aggressively, constantly seeking ways to enhance our system by manufacturing critical components in-house. This approach has been a key driver of our resilience and ongoing success.

With vertical integration, beyond controlling your supply chain, you also have the flexibility to customize and adapt your products to meet the demands of different clients. As the shipbuilding industry focuses on China, Korea, and Japan—where China excels in tankers, Korea leads in LNG carriers, and Japan specializes in other sectors—there are also distinct requirements when extending to Europe and the U.S. for warships or cruise ships. How do you respond to such diverse market demands?

Our flagship product is the ECS system, which is optimized for bulk carriers and LNG carriers. However, it’s not the ideal solution for container ships or certain types of tankers. There are specific reasons for this.

For example, container ships have smaller ballast water tank capacities compared to bulk carriers or tankers. Since they never sail without cargo, they maintain a constant total weight by balancing container loads with other weights. As a result, their ballast and deballast requirements are minimal compared to their vessel size. These ships typically prefer lighter, simpler systems such as ultraviolet (UV) treatment equipment.

Our system, which operates using electrolytic technology, is heavier and requires more maintenance. Recognizing this market gap, we knew we couldn't rely solely on the ECS system to maintain our leading position. Instead of entering the niche UV market directly, which holds limited value for us, we developed a new solution tailored to tankers: the Hychlor side-stream system. This system is more competitive and better suited for tankers compared to our full-load electrolyzer system.

Today, we actively market and sell the Electrolysis system to the tanker sector. While the total market for ballast water treatment systems is segmented, I estimate that UV systems account for less than 20% of the market, while electrolytic systems dominate with 80% or more. Given this dynamic, Techcross covers the entire electrolytic segment, leaving only the smaller niche UV market. We believe it’s not worth developing a completely new system to target a market that is already highly saturated with competitors.

ECS (Techcross BWMS installed on the vessel)

You mentioned that electrolytic systems capture about 80% of the market, while UV systems cover the remaining 20%. What are Techcross’s primary challenges today? Is your focus on maintaining dominance over the 80%, or are you exploring ways to expand into the 20%?

Our primary strategy remains firmly focused on maintaining leadership in the 80% electrolytic market. We will continue to invest and innovate to strengthen our hold in this segment and ensure we remain the number-one provider.

That said, we are not completely ruling out the 20% UV market. While we don't intend to develop our own UV systems, we remain open to opportunities such as mergers and acquisitions (M&A) if the right business case emerges. Should we identify a strategic advantage, we are prepared to enter the UV market through partnerships or acquisitions.

Our current strategy is simple: prioritize our core electrolytic market and maintain our competitive edge while staying vigilant for potential opportunities in adjacent markets.

Established in 2000, Techcross is a global leader in ballast water management systems. The company entered the market with groundbreaking electrode technology over two decades ago and quickly obtained IMO certification. Could you define what Techcross represents today and share its vision for the future?

Currently, ballast water systems account for about 98-99% of our business. However, we recently expanded into related product categories, including tank level gauging systems and VRCS (Valve Remote Control Systems). These additions will eventually be integrated under our IBTV concept.

I have particularly high hopes for the VRCS system. We developed it entirely in-house, from design to manufacturing, with our own engineers. These products will start entering the market at the end of this year or early next year, and we’re optimistic about their future potential.

That said, entering the market takes time. The shipbuilding industry is different from typical consumer markets. You can’t simply sell a product once it’s manufactured because systems like these require a proven track record. Ship owners and shipyards demand reliable, tested solutions because ballast tank operations are directly tied to the ship's safety. A mishap in ballast control can, in the worst-case scenario, lead to the ship sinking. So even with a ready product, it will take at least a couple of years to establish ourselves as a trusted player in this segment.

Historically, ballast management and ballast water treatment systems were handled by different suppliers—one for filling and managing the ballast and another for cleaning the water. What do you see as the competitive advantage of combining both under one supplier?

Our current product doesn't directly affect the ballast tank’s operational functions. What we do is handle the seawater intake for salination.

However, our vision is to integrate these functions through our IBTV and VRCS systems. The idea is for a single Techcross product to manage both the operation of the ballast tank and the water salination process. This integration offers several advantages: fewer vendors to manage and no concerns about system compatibility or interfaces between different manufacturers. We provide a single, seamless solution with integrated control.

What is your actual plan for the next couple of years, from 2025 to 2027, to build your track record for this integrated system?

Fortunately, we’ve already secured a small number of reference projects thanks to some forward-thinking customers willing to take a chance on our product in new shipbuilding projects.

Our immediate priority is to expand these references. If we can complete three successful projects, other shipowners will likely feel more confident about choosing our system. This would enable us to gradually expand our reference base.

Once we achieve a certain number of references, we can approach major shipyards and propose our system as a standard solution for new builds. This process will take a minimum of two years or more.

Thankfully, as I mentioned earlier, we already have a few references, and some small and medium-sized shipyards are starting to list Techcross products as standard options. However, securing supply deals with major players  will require at least two to three more years of effort.

Techcross factory

I’m curious about how easily your technology could be copied by competitors. As more ship owners adopt this kind of technology in the coming years, how risky is it for competitors from China, Germany, Japan, or Greece to enter the market, potentially capturing market share?

In the ballast water treatment system market, we were a first mover. However, for VRCS, we are a follower. It’s actually the existing players who should be concerned about what we bring to the table as a new entrant.

The ship equipment industry doesn't evolve as rapidly as sectors like automotive. It’s a very conservative market because ship safety is critical. Even a minor design change needs to be rigorously tested and validated before shipyards will accept it. Many current VRCS manufacturers have relied on systems they designed and manufactured years ago without making significant updates.

As a follower, we thoroughly benchmarked these existing systems and developed a design that offers better performance with a smaller footprint and improved reliability. That’s our key competitive edge. If we can demonstrate that our system, with the same specifications, is more compact, easier to maintain, and delivers superior performance — such as lower leakage rates and greater durability — we can confidently claim that we offer a superior product. That's precisely why we chose to develop it in-house instead of simply sourcing existing components from others.

In 2022, Techcross achieved record-breaking revenue, but 2023 was more challenging due to industry trends. How do you foresee the company's growth and evolution with these new projects?

The ballast water management system retrofit market is now completely saturated. However, we believe the new shipbuilding market will remain relatively stable because fluctuations in project numbers are far less extreme compared to a decade ago. Back then, we saw significant peaks and troughs, but the market has now leveled out.

Given our number-one market position, we expect a steady stream of new shipbuilding projects. We also believe that 2023 represents the bottom of our revenue cycle. Within one or two years, we anticipate renewed growth driven by the additional revenue from VRCS products.

While I can't openly share detailed numbers, our after-sales service business is also growing. We’re being cautious about publicizing this growth, as we don't want to alert our competitors.

Is there any chance that your clients might switch to different products during after-sales or maintenance operations?

The likelihood is very low. For a standard ship — typically 60,000 to 80,000 deadweight tons — the ballast water system alone costs between $200,000 to $300,000.

Replacing an existing system involves not only the cost of the new system but also the significant expenses of dismantling, disposal, installation, and commissioning. This process requires costly dry-docking and several days of off-hire, which leads to high labor costs and operational disruptions.

Given these factors, shipowners usually stick with their installed systems unless they are truly unsatisfactory. Unfortunately, there are some subpar products on the market. What we aim for are the rare cases where shipowners say, "I’m fed up with this system — I can’t deal with it anymore. Please remove it and install a new one."

Although this is a relatively small market, we are targeting these opportunities aggressively. Beyond that, we expect most of our existing installations to remain unchanged.

Since the ballast water management system market has plateaued, you are diversifying your product offerings to sustain growth. Beyond the shipbuilding industry, you are also exploring new fields such as green technologies and wastewater treatment systems. Could you elaborate on this diversification?

Initially, we considered leveraging our existing electrolyzer technology for land-based applications. However, we quickly realized that our products are optimized for maritime environments. They are built to withstand extreme conditions — heavy winds, rolling, pitching, high salinity, continuous movement, and the high temperatures of engine rooms.

These conditions require a robust and rigid design, which isn’t cost-effective or practical for land-based use. To adapt the technology for ground applications, we would need to develop a significantly lighter and more economical version, which demands an entirely new development process.

Instead, we decided to focus on repurposing the core technology — electrolysis — for green hydrogen generation. This shift offers far greater market potential. Although our ballast water treatment technology could technically be applied to land-based wastewater or drinking water treatment, those markets are relatively limited. Green hydrogen, on the other hand, presents a much more promising growth avenue, and our core expertise in electrolysis positions us well to succeed there.

For the hydrogen business, how do you see the timeline for your products entering the market? Do you expect short-term or long-term adoption, and will it be limited to Korea?

Unfortunately, Korea is late to the game. Global leaders in green hydrogen generation include Japan, Germany, Norway, and China, all of which are many years ahead of us.

However, we are confident because green hydrogen isn't just an ordinary industry — it's a strategic core infrastructure sector. Every country is motivated to develop and sustain its own hydrogen production capabilities.

Our immediate goal is to become Korea's top manufacturer for hydrogen generation systems, and I can confidently say that we’re very close to achieving that.

Is your system fully qualified?

While I can't disclose everything, I am highly confident. That confidence was reinforced just yesterday when we hit a major milestone. We secured several critical government-funded projects and achieved our target of developing a 250-kilowatt system ahead of schedule.

During testing, the system operated at over 80% efficiency — exceeding our design specifications — and performed flawlessly without major issues. Our next step is to develop a 2.5-megawatt system, which will represent a significant leap forward.

Even though our system isn't yet the largest globally — many companies in China, Japan, and Germany have already reached multi-megawatt capacities — we excel in a crucial area: managing input power fluctuations.

Green hydrogen production requires renewable energy sources like solar and wind, which are inherently unstable. When power supply drops dramatically, there’s a risk that hydrogen and oxygen could mix inside the system, creating an explosion hazard.

Our technology demonstrates one of the lowest crossover rates in low-power conditions, which is essential for safe and efficient hydrogen production. That gives us a strong competitive advantage.

H2 MEET 2025 (Techcross booth at the largest hydrogen exhibition in Korea)

To handle power fluctuations from solar panels and wind turbines, companies often use intermediary systems like batteries or rotating wheels. When you commercialize your system, will it be a standalone unit requiring additional components, or will you offer a complete solution?

We provide a complete solution. Our system includes the hydrogen generation stack and a Balance of Plant (BOP) that handles purification, moisture removal to achieve 99.999% purity, and power stabilization.

The entire system is designed for direct installation. You simply connect it to a photovoltaic or wind power source, and it’s ready to operate. There’s no need for the owner to handle additional installations.

Many current systems require expensive energy storage solutions (ESS) to manage power fluctuations, often at 100% of total capacity. However, our design nearly eliminates the need for ESS or reduces it to only a fraction of total capacity, significantly lowering costs.

Our immediate focus is on solidifying our position in the Korean market. If successful, we plan to expand globally within the next three to five years.

You mentioned IT and digital integration within your system. Is this a particular strength of Korean companies? I understand you’ve developed a global platform—could you explain its relevance for European customers?

In our Ballast Water Treatment System, we’ve already embedded advanced software that connects with the system's sensors. Typically, data from our system is recorded at the ship’s control center.

We are developing an AI-based operating system that can transmit this data in real time to our server, providing valuable insights to ship operators. For example, by monitoring voltage and wattage patterns, we can detect abnormal peaks or alarms. If a pattern suggests an imminent power rectifier failure, we alert the operator to inspect or clean the component.

Similarly, if certain system components experience a sudden surge in usage, we can notify the shipowner to clean the system and maintain optimal operation. These predictive insights help operators prevent failures and reduce maintenance costs.

One major shipyard has recognized our capabilities and approached us to join their intelligent ship management system project. Given our strong track record—with installations on more than 400 vessels—they've invited us to contribute specifically to ballast water management within their AI-powered platform.

The goal of this report is to capture the perspectives of industry leaders in Korea and across the global supply chain. In just one or two sentences, what message would you like our readers to take away from this interview?

Your initial statement highlights a concern shared by many Koreans. While Korea excels in manufacturing industries such as shipbuilding, automotive, semiconductors, and home electronics, we have yet to succeed globally in the service sector.

Our manufacturing leadership is now under threat, particularly from Chinese competitors. This poses a significant risk for many Korean SMEs, which remain heavily dependent on conglomerates. If these giants falter, tens of thousands of SMEs could face bankruptcy.

SMEs must find ways to reduce dependency on these major corporations. While maintaining existing business relationships is important, they need to actively seek new opportunities and diversify their customer base.

Let me share a personal story from the 1990s when I was a purchasing director at a well-known U.S. corporation. I wanted to source Korean components because they were high-quality and cost-competitive. However, when we reached out, many Korean companies didn't respond—they were too focused on serving their domestic conglomerate customers and lacked the ability to conduct business independently on a global scale.

Thankfully, that is changing. More Korean SMEs are now finding their own paths and becoming less reliant on large corporations. For the survival and growth of Korean SMEs, this shift is essential.

While Korea's current success owes much to its conglomerates, and there have certainly been negative side effects, those contributions were invaluable. As with any story, there are two sides to the coin—but the progress achieved was worth the challenges.

For more information visit: https://techcross.com/techcross/en/m21.php