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Interview

Now Systems looks to metal detector market for EV batteries

Dong-Hyun Kim Oct 16, 2020 (Gmt+09:00)

Now Systems Co., a South Korean metal detector maker, is looking to enter the digital detection equipment market to check metals used in rechargeable batteries.

The Korean leader in the manufacturing of metal and automatic weight detectors said the new market holds huge growth potential for the company, and is likely to boost its revenue in coming years.

“The detection of metal contaminants in lithium-ion batteries requires cutting-edge technology, which puts us at an advantage over our rivals,” Chief Executive Choi Hak-Gyu told The Korea Economic Daily in a recent interview.

“Demand for such detectors will increase considerably in line with the growth of the electric vehicle market.”

Now Systems CEO Choi Hak-Gyu

Now Systems, currently developing metal detectors for materials used in rechargeable batteries, expects its sales revenue to more than double to 300 billion won ($262 million) in 2022 with the commercialization of the machines, from 12.4 billion won in 2019.

Established in 1991, the company is already the No.1 manufacturer of various digital metal and automatized weight/defect detectors in Korea, with its local market share of some 40%.

Its representative metal detector model, NMD530 series, is an inspection device that detects metal, such as iron and stainless steel, inadvertently incorporated in products. For food processing, the model screens for metal contaminants that humans or animals should not consume.

The machine is also used to detect metals in the clothing, shoes and sewing sectors as well as screening for metallic impurities in raw materials and a variety of finished goods.

Its major clients are food and meat processing companies that need government approval for HACCP, a food safety hazards management system.

The company said the model automatically selects the correct operating frequency for maximum contaminant sensitivity, removing the need for manual adjustments.

ACCURACY IN DETECTION

CEO Choi said the company’s machines use a multi-frequency operating system similar to that of high-end brands used in Europe and Japan, offering unparalleled accuracy in the detection of metallic contaminants.

“Compared to foreign products that use a single-frequency system, our products produce more accurate results. Price-wise, ours are 60% to 70% cheaper than Japanese and European products,” he said.

The company has also unveiled different models of metal detectors, including Alcon and Yanus. Alcon uses a strong magnet and two sensors to detect small metal contaminants in aluminum-packaged products. Yanus is the world’s first hybrid metal detector using an electromagnetic and magnetic mechanism simultaneously to detect needles and mesh wires in food, according to Now Systems.

The automatic weighing device, another key product of Now Systems, automatically measures the weight of goods and detects faulty products when passing through production lines at manufacturing companies.

In 2019, the company exported some 450 units of digital metal detectors and weighers to 34 countries.

NMD530 metal detector made by Now Systems

INVESTMENT FROM INSTITUTIONAL INVESTORS

Now Systems has attracted investment from institutional investors that foresee its growth potential in local and overseas markets.

Last July, it secured over $10 million in investment from Korean equity fund Seo & Company Ltd., which specializes in information technology buyouts.

Korea Growth Investment Corp., an independent fund-of-funds management company dedicated to providing risk capital to Korean startups and smaller firms, has also invested in the PEF. Other limited partners include Kyowon Group, one of Korea’s largest education-related firms, and Eone Diagnomics Genome Center Co. (EDGC), a bio-tech company listed on the Korea Exchange.

The PEF investment was done through a management buyout (MBO) scheme, in which Now Systems’ existing management team also invested to run the company.

Write to Dong-Hyun Kim at 3code@hankyung.com

In-Soo Nam edited this article.

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