Korean boiler makers set sights on Central, South America

South Korea’s major boiler manufacturers are stepping up overseas expansion to diversify beyond the saturated domestic market, setting their sights on Central and South America.

Kyung Dong Navien Co. opened a subsidiary in Mexico in late June to boost its presence in Central and South America.

Mexico is not a big market for boilers, but water heater demand there is growing in high-altitude areas more than 2,000 meters above sea level.

Because of the thin air there, many water heaters malfunction, so replacement demand is expected to rise.

The water heater market in Mexico is estimated at 700,000 units per year, or above.

Kyung Dong Navien pins high hopes on its condensing boilers, which it says work stably with high energy efficiency. It ranks top in Chile’s water heater market, underlining its competitiveness in high-altitude areas.

Kyung Dong Navien accounts for 88% of South Korea’s boiler exports, shipping its boilers and water heaters to 47 countries.

It is the biggest player in the US where it entered in 2008. It established subsidiaries in Canada and Uzbekistan in the latter half of last year. As of end-2022, it derives 67% of its sales from abroad.

Kiturami Boiler Co. is gearing up for global expansion, led by its new Chief Executive Kim Hak-soo, who took office last month.

In a recent internal memo to employees, Kim said the company needs to expand into new territories such as Central and South America, where it has no presence yet.     

It is sharpening its competitiveness in the US, China, and Russia with localized services.

Kiturami built production lines in Tianjin, China in 1999, in its first step toward overseas markets. Since then, it set up subsidiaries in the US in 2014; in Uzbekistan in 2018; and in Russia in 2020.

As an original design manufacturer, it is selling boilers in the US and condensing gas boilers in Russia. It is also exporting oil and gas boilers to Chile and Uruguay.

South Korea’s boiler market is in the mature stage with annual sales hovering between 1.1 million and 1.45 million units. The average lifespan of boilers is around 10 years, so they do not create as much demand as other household goods.

Write to Kyung Ju Kang at qurasoha@hankyung.com


Yeonhee Kim edited this article.