Kobe Steel Ltd. will open a new company in Busan, South Korea, in July, to market welding consumables. The plan is to establish a single source for on-site response and technical development capabilities, as well as welding consumables, welding equipment, and expertise in construction methods. Kobe Steel is a manufacturer with subsidiaries in a range of markets, including iron and steel, welding, aluminum and copper, machinery, natural resources and engineering, environmental solutions, construction equipment, and others.

The Republic of Korea will be the third market Kobe Steel has targeted in the past 12 months (following China and India) with new ventures marketing welding equipment and consumables. In particular Kobe wants to raise its market share among Korean heavy machinery manufacturers, who are increasing their presence in the global market for energy projects; and to continue supplying welding consumables to domestic industries, notably shipbuilding.

A company called Kobe Welding of Korea was established in 1995 to produce and market flux-cored welding wire for mild steel, but Kobe Steel explains it was unable to gain full ownership of the venture. So, it established a distributorship, KWK, as a venture with McQAN Corp. to supply a wider variety of welding consumables in South Korea.

In particular, KWK and McQAN have been marketing welding consumables to Korean shipbuilders. South Korea’s energy markets (nuclear power, LNG tanks, and other energy fields) have been supplied with welding consumables exported from Japan and distributed through McQAN.

In April, the steel and manufacturing group established the new company, Kobelco Welding Marketing of Korea Co. Ltd. (KWMK). It will be 51% owned by Kobe Steel, 40% by McQAN, 7% by Kobe Steel Welding of Korea, and 2% by Japanese trading firm Shinsho Corp. Kobe Steel stated that KWMK will allow it to build an efficient and effective marketing network in South Korea, strengthen ties with major customers, and build sales volumes.

Kobe Steel explained that it anticipates demand from South Korea’s shipbuilding industry will decline in the future, so it intends to maintain its sales volume by offering welding solutions that combine on-site response and technical development capabilities with welding consumables, welding equipment, and process expertiese.

In the energy sector, South Korean heavy-machinery manufacturers are developing overseas markets for their products in emerging countries so Kobe Steel hopes to strengthen its relationships with those companies in order to increase order volumes. Some of the welding consumables needed for the energy sector include welding wire for heat-resistant, low-alloy steel, low-temperature steel, and nickel-based alloys.