The Art of Building Up: Kanglim’s Expertise in Truck-Mounted Cranes

The reputation of South Korean construction projects overseas is growing phenomena, and the quantity of orders was surpassing $35 billion in 2024. Some observers argue that it is a good opportunity for Korean construction-related suppliers to make a step outside the domestic landscape. Do you believe now is the right time for Korean companies like yours to expand internationally?

Kanglim was established 45 years ago. When we first began, our exports were non-existent. However, 45 years later, exports accounted for 40 to 50% of our revenue. Initially, we focused on mining equipment. Over time, as coal resources diminished in Korea, we shifted our paradigm and diversified our portfolio to include construction, environmental technology, electricity construction, and national defense. This transition occurred 40 years ago and remains our focus today.

The domestic market in Korea is relatively small, and our sales eventually reached a plateau. That prompted us to look abroad, leading to exports now comprising over 40% of our revenue. In our market, the exchange rate plays a critical role. Currently, the weak Korean won against the dollar is working to our advantage.

The Korean government is currently investing in large conglomerates to secure overseas orders. However, this initiative is still in its early stages. I believe its impact will be felt two or three years from now. For now, our priority is maintaining strong relationships and continuing exports to our existing international partners.

You mentioned the government’s investment in conglomerates. Furthermore, companies under the big conglomerates benefit from the brand’s reputation and investment capital. However, Kanglim has achieved 45% of its revenue from exports without such backing. What have been the key drivers of Kanglim’s success in this competitive market?

This is precisely why Kanglim stands out as a strong and independent leader. We have invested in our own technology and development. Both our technological advancements and marketing strategies are internally managed without external support from large conglomerates. While many companies operate under the umbrella of larger corporations, we focused on developing our own capabilities. Though this path presented many challenges, it has significantly enhanced Kanglim’s corporate value—to the extent that I believe it surpasses that of Hyundai Everdigm today.

Approximately 35 years ago, Hyundai Motors approached us with a subcontractor agreement. We chose to decline this offer, which I see as a pivotal moment in our journey. Back then, companies like Kia, Hyundai, and Daewoo were dominant players. However, they are rarely mentioned in discussions about our industry today. This decision allowed us to maintain independence and pursue our own growth strategies.

At the time, Kanglim was unparalleled. Many companies offered us subcontractor roles, but we consistently refused due to the trade-offs involved. Associating with one conglomerate often alienated others. We wanted to avoid such compromises, so we decided to chart our own course.

When companies operate under a large conglomerate, they often face numerous restrictions, which can stifle innovation and growth. This is why we chose to remain independent, allowing us to focus on developing our own technology and products. Our autonomy has been the cornerstone of our competitiveness and long-term success.

Knuckle Cranes

Today, the overseas markets present a myriad of opportunities in different regions. For instance, the construction market in Southeast Asia is booming with the development of larger cities, while renewable energy projects in China and Europe are receiving significant investments from governments and corporations to combat climate change. With Kanglim’s extensive experience, where do you see opportunities to capture market share?

Our primary focus remains on Russia and Ukraine. President-elect Trump has expressed a desire to end the Russia-Ukraine war soon. When the war ends, the subsequent reconstruction efforts will create immense opportunities for us. Similarly, we foresee opportunities in Israel and Palestine as these regions will also require extensive rebuilding. We are actively preparing to seize these opportunities as they arise.

One of our key products is the knuckle crane, which is highly effective in handling debris and assisting in reconstruction. Given the destruction caused by the war in Ukraine and Russia, these cranes will play a pivotal role in clearing debris and constructing new buildings. A major advantage for us is that Korea maintains business relationships with both Ukraine and Russia, giving us a unique competitive edge.

Currently, we have four Russian partners. On Monday, one of the largest Russian dealers will visit Korea to discuss new projects and propose future collaborations. We are optimistic that these discussions will lead to significant opportunities. Additionally, we have established a network in Ukraine with a service and sales foundation, which positions us well for future growth.

Export controls to Russia posed significant challenges for Kanglim this year. With these constraints in place and other regions like Vietnam and Thailand showing promise, do you see these regions playing a bigger role in your international business?

We conduct business across multiple regions in Russia, not just in specific areas. If the Korean government grants us permission to continue exporting to Russia, we will be the first company to receive such approval. This would give us a significant competitive advantage over our competitors.

Given the risks associated with heavy reliance on the Russian market, are you exploring other global markets for diversification?

While Russia accounts for a large portion of our exports, we recognize the risks of over-dependence. If the Russian market falters, our sales would be severely impacted. Therefore, we are actively seeking opportunities in other global markets, particularly in Southeast Asia and the Middle East. These regions offer immense potential, and we are engaged in ongoing negotiations to establish partnerships and expand our presence.

For instance, cranes and aerial platforms require a certain level of economic development to be viable. As labor costs rise and economies grow, demand for these machines increases. Vietnam is a prime example of a rapidly growing market, and we are focusing on expanding our business there. However, penetrating the Thai market has proven challenging due to Japan’s strong presence. Despite Thailand being the largest market in Southeast Asia, Japanese companies dominate this space. We are deploying negotiators and employees to overcome these barriers, but it remains a tough market to crack.

Kanglim's Beginning and Future

Apart from industry giants, the industry hasn’t shown significant evolution. On the other hand, Kanglim, despite being an SME with less capital compared to those giants, has implemented IoT in collaboration with RideCell to streamline production processes and has made substantial investments in ESG initiatives, such as the offshore wind farm project. These strategies seem unconventional and quite progressive for the heavy machinery sector. Why do you believe investments in technology and ESG are vital for Kanglim’s competitiveness?

First and foremost, we have the financial capability to make these investments, and that’s critical for securing the future. Our business is currently experiencing rapid growth, with high operating profits and no outstanding loans or debt. This strong financial foundation enables us to invest in future technologies and innovations confidently.

Our partnership with RideCell, a venture company often referred to as the "Tesla" of our industry, is a perfect example. By collaborating with such forward-thinking companies, we position ourselves at the forefront of technological advancements, ensuring we stay ahead of the curve in an increasingly competitive market.

While quality and performance are essential, lead time and pricing often become the deciding factors in winning bids. How does your investment in IoT enhance your competitiveness in these areas?

Our IoT investments are focused on the long-term future, while factors like lead time and pricing are more immediate concerns. These are distinct aspects of our strategy. IoT will undoubtedly strengthen our operations in the long run, but for now, we’re addressing lead times and costs through other innovative practices.

Other companies also produce specialized cranes, leading to a highly competitive market. What advantages does Kanglim’s knuckle crane offer over its competitors?

Our knuckle cranes stand out in three critical areas: price, quality, and lead time. For example, once an order is placed, we can deliver and ship within two to three months. In contrast, many Japanese companies take five to six months to complete similar orders.

Achieving such a short delivery time is impressive. How does Kanglim manage this efficiency?

The key lies in our preparedness. We maintain an inventory of essential materials and parts, allowing us to assemble orders quickly. Japanese companies, by comparison, often start sourcing materials only after an order is placed, which significantly extends their delivery timelines.

Additionally, we’ve developed accurate forecasting capabilities to anticipate future needs, enabling us to stockpile necessary components in advance. This proactive approach is a significant factor in our efficiency. Our familiarity with Japanese operations, through our partnerships, also provides us with insights. For instance, when we place an order with one of our Japanese partners, it often takes a minimum of six months for delivery—a stark contrast to our faster processes.

One challenge of managing a large inventory is that the stock size often correlates with the number of part numbers and product types you have. Are you currently focusing on a select range of part numbers and specialized products with specific load categories? Or are you aiming to cover a broader portfolio?

We do not stock parts for all of our products; we primarily focus on the major items in our lineup. Some products in our portfolio take six to seven months to manufacture as they are order-based. This longer production time is due to the complex and customized nature of these products.

The Southeast Asian market is seeing significant growth in construction activity, driven by the expansion of urban areas. These cities, often characterized by narrow spaces, require efficient and compact products, making them ideal for medium-sized series. Could you identify which part of your portfolio serves as your cash cow and is currently being actively promoted? Is it the KS2056H (20-ton . m range, 8-ton lifting capacity)?

The model you mentioned, the KS2056H, is indeed one of our most popular models. However, we also offer larger models. For example, Japan has regulations limiting the size of cranes to under five tons. Therefore, we focus on exporting cranes that exceed this capacity, as we cannot compete with the low-cost, mass-produced compact cranes manufactured in Japan. Additionally, Japanese cranes are primarily designed for delivery purposes, while our cranes serve both delivery and construction applications. This sets us apart in terms of functionality and market positioning.

So, your focus is on delivering cranes with a capacity of over five tons. What limitations do you encounter with these heavy-duty cranes, particularly given their complexity?

In Japan, crane sizes are strictly regulated, which limits the scope of what we can supply there. However, in Korea and Europe, we enjoy greater freedom in terms of crane size and chassis design. As long as the equipment meets safety standards, there are no significant limitations in these regions.

One constraint we do face is the load capacity of the truck chassis. The crane's size and weight are ultimately determined by the truck’s ability to support it. Beyond that, we have few restrictions. After this interview, you’re welcome to check out our enormous crane over there—it’s a type you wouldn’t find in Japan due to their stringent regulations.

The truck and crane are very closely interconnected, which is why we collaborate extensively with truck manufacturers like Hyundai and Tata daewoo. However, if you look at the truck displayed over there, you’ll see it’s manufactured by Kanglim. We handle the quality inspections and obtain the necessary certifications for the truck. This is why our collaboration with truck manufacturers is so essential—it ensures compatibility and top-tier performance.

I understand the business side is just as important as the technical aspects. When selling to customers, do you offer a full-package solution with the truck and mounted crane together, or do you also sell cranes separately for partners working with local truck manufacturers?

Photo: different package solutions i.e. truck and mounted crane or separately

We have two sales approaches. The first is the full-package solution, which includes both the truck and the crane. The second involves working with local agencies. In this case, we provide the crane, and they purchase a truck separately and mount the crane onto it. This flexibility allows us to meet the varied needs of our customers across different markets.

Earlier in the interview, you mentioned that in some markets, you still need to expand partnerships to reinforce your network and reach the same level as in Russia and Vietnam. What qualities do you look for in an ideal partner in these new regions? Should they simply sell the trucks, or should they also have the capability to collaborate and mount the cranes?

First and foremost, we need partners that can mount our cranes onto trucks. Shipping both the truck and crane together would significantly increase shipping costs, so we aim to work with local companies capable of using their own trucks with our cranes. We provide detailed mounting manuals, which include specifications and the equipment needed to mount our cranes properly. Additionally, we conduct inspections of the mounted cranes and provide training for their workers to ensure high-quality installations and operations.

I understand you’ve developed a 5G-integrated system to enable real-time monitoring of crane operations. How do you envision the development of new technologies over the next three to five years?

One of our key investments is with RideCell. Once we perfect this system, we will use it as a foundation to explore further advancements. As for the development of 5G-driven special-purpose systems, these are primarily intended for domestic use rather than exports. However, one of the challenges we face is the high cost of such systems. We’re still assessing whether our clients and companies will adopt this advanced technology. While promising, it remains in the early stages of development, so we’re taking a cautious approach as we evaluate its potential and market demand.

Over the past decade, Kanglim’s revenue has grown steadily, reaching nearly 200 billion KRW, with an operating profit of 11 billion KRW. This success stems from your focus on the construction, infrastructure, forestry, safety, and military sectors. How do you envision the company’s growth over the next five years? 

The 200 billion KRW figure includes the contributions from our subsidiaries. For Kanglim alone, we achieved 156 billion KRW in revenue in 2022, along with an operating profit of 19.5 billion KRW—a record high for us.

Looking ahead, we are targeting aggressive expansion into international markets, focusing on Russia, Southeast Asia, the CIS, and the Middle East. We are actively pursuing marketing activities in these regions, with the goal of reaching 250 billion KRW in revenue by 2030 (Kanglim alone).

Our products aren’t simply sold based on cost-effectiveness or quality alone. Each market presents unique construction challenges and logistical systems that require thorough quality inspections and tailored solutions. Unlike general consumer products, our offerings demand a deeper understanding of local conditions, which takes time. However, once we establish a foothold in a market, our growth accelerates significantly. We are confident this strategy will yield substantial results in the coming years.

If we were to meet again in 2030 for another interview, what personal achievement would you like to highlight by then?

I am confident that we will achieve our financial targets, as we have clear mid- to long-term goals in place. We attend many construction machinery exhibitions, and attending such events is a key part of our strategy to fulfill our objectives. We have numerous projects and initiatives planned to support this vision.

Even if I retire by then, I am certain that our dedicated employees will carry forward this work and accomplish these goals. Kanglim’s strength lies in its people, and their commitment ensures our continued success.

To learn more about Kanglim, read their article on newsweek.com/KANGLIM