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Hidden Champions

Buhmwoo Group logo
Buhmwoo Group Chemicals

Buhmwoo Group is South Korea’s leading maker of metalworking fluids (MWFs). It has been building up technical expertise in rolling oil, cutting oil, rust preventatives and metal forming oil since the foundation in 1973. Making products with a quality on par with those of the top three global manufacturers, Buhmwoo is an essential companion to Korean heavy industry companies and has supported them to maintain global competitiveness over the last 50 years.

Published: Apr 21, 2021 (Gmt+09:00)

Last updated: Jul 15, 2021 (Gmt+09:00)

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The Mastermind of Fluids

Industrial fluids expert with new ventures in home hygiene, smart farming

Buhmwoo Group’s Chairman Kim Myung-won first became familiar with rust preventives, which are oils that protect the surface of the metal workpiece from rust, in the 1970s during his studies abroad in Germany and the US.

South Korea was undergoing the third phase of the Five-Year Economic Development Plans, during which the country saw unprecedented rates of growth in shipbuilding, auto-making, steel and machinery sectors.

Having returned to South Korea after finishing his studies, Kim decided to establish Buhmwoo Chemical Industry Co. in 1973, with a conviction that the rapid growth of the auto and heavy industry companies will undoubtedly fuel the demand for MWFs.

Kim’s first business model was selling imported rust prevention oil from the US to domestic customers. His company initially imported and sold the globally popular WD-40 product, which became an immediate hit in the Korean market as well.

The young entrepreneur’s ambition didn’t stop there. He wanted to become something more than just an importer. Kim dreamed of contributing to the country’s economic growth by manufacturing MWFs within Korea’s own turf.

“Achieving domestic production of metalworking fluids, essential for Korea’s industrialization during the 1970s, meant that I could contribute to the country’s economic development and grow my own business at the same time,” Kim reflected.

Under Kim’s vision, Buhmwoo Chemical Industry created a dedicated team in 1976 to research and develop MWFs. After two years of ceaseless efforts, the company successfully started to manufacture its first cold rolling oil in 1978, with the domestic steelmaker Union Steel Co. as its first client.

Buhmwoo’s domestic production brought a pleasant surprise to the country’s steelmakers, all of which were importing 100% of their rolling oil volume from overseas.

More than 40 years after manufacturing its first product in 1978, Buhmwoo currently makes more than 1,000 types of MWFs for steel companies, automakers as well as auto parts manufacturers. The company’s domestic market share stands at around 50% with POSCO, Hyundai Steel Co., Hyundai Motor Co. and Kia Corp. as its major clients.

Established as a small industrial chemicals importer, Buhmwoo Group has grown into a large business group with multiple subsidiaries. The group now consists of Buhmwoo Chemical Industry Co., Buhmwoo Co., Buhmwoo Institute of Technology Research, BIT Eco Lub Co., BEX-Inter Corporation, Buhmwoo Tech & Supervision Inc., as well as the agricultural company GCL FARM.

Buhmwoo Group also has several entities overseas: two in China and one each in India, Indonesia, Mexico, the US and Vietnam.

The group-wide annual revenue as of 2019 recorded around 320 billion won ($286 million).

Contents

  • [Product & Value Proposition] Industrial Fluids with a High Degree of Client Customization
    Young Buhmwoo India (YBI) is Buhmwoo Group's overseas entity located in Tamil Nadu, India

    Buhmwoo’s clients say that it possesses a special ability in developing specifically-tailored products that can address their exact business needs.

    The company’s Super Clean rolling oil, jointly developed with the leading steelmaker POSCO, provides an example of such a high degree of product customization.

    Back in 2006, POSCO wanted to secure Asia’s leading automaker Toyota Motor Corporation as a new client for its steel plate products. The steel company had just finished setting up a production line of steel plates for automobiles, with an annual capacity of 6.5 million tons.

    POSCO believed that it would fail to win orders from Toyota without making significant improvements in product quality, as the Japanese auto company was known for its stringent quality control and assurance procedures regarding the steel plates.

    POSCO wanted to focus on improving the quality of the surface of its steel plates, as lubricity and smoothness of the plate surface have a direct impact on the overall exterior design of the vehicle.

    To this end, the steelmaker contacted Buhmwoo Institute of Technology Research (BIT) in 2007 to request the development of a rolling oil with superior cleaning function and better lubricity. Rolling oils are used during the steel rolling process that thins the metal alloy uniformly.

    In April of the same year, a task force has been formed within BIT to lead the development of the new type of cold rolling oil for POSCO’s auto steel sheets. The task force team was headed by the senior manager Kwon Goo-jun, supported by the researchers So Kwang-chul and Kim Shin-ae.

    The project team set up three technological objectives:

    First, the new rolling oil must maintain high lubrication performance and at the same time ensure the safety and stability of POSCO’s overall manufacturing process.

    Second, the oil must improve the cleanability of the rolling mill and the steel strip, control the amount of oil and iron substances that adhere to the steel strip surface, while at the same time be able to break up and discharge worn iron fines.

    Third, they must develop an oil emulsion technology advanced enough to keep the rolling mill in a clean condition.

    Through almost endless days of research and testing, the task force eventually found the appropriate materials and the right mix ratio for the rolling oil that offered the optimum level of lubricity.

    But right after producing the prototype, the team ran into an unexpected error, forcing it to dispose of the entire quantity of the prototype volume.

    After carefully reviewing and fixing the error, BIT’s task force could finally conduct an on-site inspection with POSCO representatives, who showed extreme satisfaction with the final product.

    The new rolling oil not only succeeded in minimizing the friction between the rolling mill and the steel strip but also filtered out wastes created during the work process. Even after several hours of operating the steel manufacturing facilities, Buhmwoo’s rolling oil remained clean while maintaining its original lubricity.

    Thanks to using the newly developed Super Clean rolling oil, POSCO could make a quantum leap as a steelmaker by successfully setting up a production system for defect-free, high-quality cold rolled steel coil in its plant in Gwangyang city.

    After the development of the cold rolling oil, Buhmwoo has been recognized with POSCO Supplier Quality Certification (POSQC) three times. POSQC is an award given to the company’s top suppliers that made significant contributions in improving POSCO’s product quality.

    Buhmwoo Group Chairman Kim Myung-won (third from the right) receiving POSQC award in 2017

    The new rolling oil has improved the cleanliness of the steel strip surface by 30%, reduced the usage volume of rolling oil by 10%, and also reduced the deposit amount of the steel strip by 40%.

    Buhmwoo says that the rolling oil also provides a better work environment for clients by improving the stability of the machinery and reducing the cleaning cost for the rolling mills.

    The company’s game-changing fluids have been highly acclaimed by the relevant government bodies as well.

    The Ministry of Trade, Industry and Energy and Korea Trade-Investment Promotion Agency (KOTRA) selected Buhmwoo’s cold rolling oil and anti-rusting oil for steel sheet as World Class Products of Korea and its wet temper fluids as Next Generation World Class Product of Korea.

    Vina Buhmwoo (YBI) is Buhmwoo Group's overseas entity located in the Dong Nai Province of Vietnam
  • [Market Proposition] Shift to Consumer Goods Segment with Water Expertise
    Based on its technical know-how and research experience in the B2B metalworking fluids sector, Buhmwoo Group has expanded into a B2C segment focusing on hygiene in households.

    Since its foundation in the 1970s, the company has accumulated a deep understanding of the properties and applications of water, from its track record of developing and manufacturing water-soluble MWFs.

    Based on such knowledge, Buhmwoo’s R&D unit BIT started conducting research as early as 2001 to develop a unique type of water with high detergency by reducing its surface tension.

    After 17 months of relentless research, the institute successfully developed antioxidant alkaline water that boasts a strong cleansing power against any pollutant. 

    This particular water is 99.7% made up of anionic water that is created as a result of a special type of electrolysis. The anionic water has smaller water particles than regular water, allowing it to penetrate deeper into the surface of the items that need to be cleaned.

    Highlighting the water’s strong ability to clean out pesticide residues and germs on food surfaces, Buhmwoo launched the antioxidant alkaline water solution as a fruit and vegetable wash in 2003 under the name of VegeAqua.

    VegeAqua product is for cleaning out pesticide residues and germs on food surfaces

    VegeAqua stands out among similar products as it contains no chemicals, not even the surfactants that are commonly used in the industry. As VegeAqua is colorless and odorless, it does not affect the food taste either.

    When washed with the regular tap water, only 14% of pesticide residues were removed from the tested fruits and vegetables. But when VegeAqua washed the same fruits and vegetables, around 90% of the pesticide residues were removed and also eliminated harmful germs and bacteria on the surface.

    VegeAqua’s detergency and safety has been certified by the relevant academic and government bodies including Seoul National University, National Agricultural Products Quality Management Service of Korea, Japan Food Research Laboratories as well as the US Food and Drug Administration (FDA).

    In 2013, VegeAqua also entered the US-based premium, natural foods supermarket chain Whole Foods Market. VegeAqua is the first household detergent made in Korea to be sold at Whole Foods, which is known for offering products that do not contain any artificial additives, sweeteners, coloring or preservatives.

    According to Buhmwoo Group, VegeAqua has further expanded its sales channel by signing up as an Amazon.com vendor in 2019.

    In China, VegeAqua’s sub-brand BabyAqua is marketed as the main product. BabyAqua is a detergent for baby products such as toys, and like VegeAqua it does not contain any chemicals or toxic substances.

    In addition to the usage on food sanitation and baby hygiene, Buhmwoo Group is expanding the application of its antioxidant alkaline water to other areas including cosmetics, medical products as well as electronic device cleaners.
  • [Growth Potential] Smart Farming and Functional Crops Driving Long-term Growth
    Buhmwoo Group Chairman Kim Myung-won says that he had long dreamed about creating a company that provides love to all kinds of life in clean and eco-friendly ways, under the keywords of “green”, “clean”, “love” and “life.”

    To realize his entrepreneurial dream, the chairman established GCL FARM, an agricultural company named after the four keywords, in November 2018.

    The agricultural company specializes in vertical farming, which grows crops indoors in vertically stacked layers within a controlled environment.

    This advanced type of farming adopts smart technologies to optimize plant growth by controlling and adjusting various conditions including temperature, humidity, airflow and light.  

    Buhmwoo Group Chairman Kim Myung-won at GCL FARM's vertical farm plant

    In May 2020, GCL FARM has completed the construction of Korea’s largest vertical farm plant, with a total floor space of 3,800㎡, at a site sized 10,000㎡ in Hwaseong city near the capital.

    Kim highlights that his new company and its vertical farm plant will be offering clean food ingredients that can promote public health, at a time when soil contamination, water pollution and air pollution are making it increasingly difficult to secure uncontaminated food.

    The vertical farms are reported to have multiple advantages over more traditional farms:

    First, they can provide a stable supply of crops by being independent from weather conditions including natural disasters.

    Second, such stability of supply enables these farms to avoid price fluctuation in the market.

    Third, the consumers can enjoy the farm produces without worrying about pesticide residues and metal toxicity, which are common issues for traditional farm crops.

    Crops growing inside GCL FARM's vertical farm plant

    Last year, GCL FARM was selected to receive financial and technical support from the Korean government’s Rural Development Administration on its vertical smart farm modeling project.

    After having successfully cultivated the state-funded project’s pilot crops in October 2020, GCL FARM plans to also grow functional crops, which can be used as the base material for various health products, cosmetics, as well as medical products. 

    The company says it also hopes to export vertical farm plant technologies overseas, after accumulating the relevant technical expertise in Korea.
  • [Corporate Culture] Human-centered Organization with Focus on Social Contribution
    Buhmwoo Group says that it could sustain business growth for almost 50 years largely due to its unique corporate culture driven by two key management philosophies.

    The first is humanism. Buhmwoo founder Kim Myung-won believes that people are the most important of all. Kim says he was a firm believer in the humanist philosophy even prior to the establishment of his company 47 years ago, and that these ideas were infused in its founding principles.

    Based on the management philosophy that puts people before everything else, Buhmwoo Group has never had a layoff in the company’s long history, even during the first and second oil shocks in the 1970s, the Asian Financial Crisis of 1997 and the Global Financial Crisis of 2008.

    Kim’s people-first philosophy, unflinching even during the Asian Financial Crisis when the group’s management team argued that a layoff was inevitable, earned him the deep trust and respect from employees and clients alike.

    Buhmwoo Group employees posing in front of its manufacturing facility

    His second guiding philosophy is social contribution. From the very start of his company, Kim dreamed of building a better society through business.

    To this end, Buhmwoo Group has not only been providing top-quality customized products to its clients but has also engaged in various social responsibility activities since 1990.

    Kim donated part of his private fortune to establish the Buhmmyung Scholarship Foundation in 1990, which so far has provided support of around 15.5 billion won ($13.9 million) to students in need.

    Also since 1990, Buhmwoo has been reaching out to remote villages in Gangwon Province, located in the eastern end of the country, and South Jeolla Province, located in the southern part of the Korean peninsula, in the form of a sisterhood relationship.

    The group has been helping its sister villages with scholarship support, direct sale of local produces, as well as funding for field trips to overseas farm sites with more advanced levels of agricultural development. Moreover, Buhmwoo employees are making yearly visits to the villages to help out with farm chores.

    Last year, the country’s Ministry of Health and Welfare added Buhmwoo Group to its list of companies making a significant contribution to local communities.

    In 2017, the company earned the Dongbaek Medal -- the third-highest grade among five -- of the Order of Civil Merit awarded by the South Korean president to individuals or entities that have shown “outstanding meritorious service in the area of politics, economy, society, education, art or science in the interest of improving the welfare of citizens and promoting national development.”

By Nak-Hoon Kim; edited by Daniel Cho (nhk@hankyung.com)