[Busan = Newsis] Reporter Baek Jae-hyun = Weakness in the manufacturing industry is often cited as a weakness of the Busan economy. In fact, Busan’s share of the service industry reached 73.6% (as of 2020), which is more than 10 percentage points higher than the national average (63.2%). For this reason, it is pointed out that it is inevitably vulnerable to the so-called “three high waves” such as high prices, high interest rates, and high exchange rates these days. However, there are not a few competitive manufacturers armed with technology in Busan. On the 17th of last month, the Ministry of SMEs and Startups launched ‘Regional Innovation Leading Companies 100’. Newsis introduces 3 of the 8 companies selected in the Busan region with the help of Busan Techno Park.
Located in Noksan Industrial Complex, Gangseo-gu, Busan, DASCO is a company with the best technology in Korea in terms of heat exchangers used in compressors. Established in 1996 by alumni of Busan Mechanical Technical High School, this company has been digging only one well in the heat exchanger field for over 20 years.
Chairman Geun-Young Lee, who joined the company in 1996 and took office as CEO in September 2018, introduced DASCO, saying, “It was literally a history of believing that ‘only technology is the way to survive’.” Chairman Lee is a graduate of the 14th class of Busan Mechanical Technical High School, and the current president, Lee Sang-gyu, is also a graduate of the 23rd class.
Chairman Lee said, “In the beginning, we received blueprints and did simple production, but as we went through intensifying unit price competition, we clung to technology development.” It could have been a burden for small and medium-sized businesses that always had to face immediate livelihood problems, but the reason why they established their own research center in 2008 was to spur technology development.
Since then, DASCO has made every effort to secure high-quality human resources. From 2019 to last year, it has steadily increased the number of core technical personnel, such as hiring an additional research and development (R&D) professional manpower each year. Since they are not in a position to give high salaries like large corporations, they have been recruiting technical personnel to explain the company’s future vision rather than immediate compensation.
Thanks to this, DASCO has registered 6 patents in the core technology of heat exchangers and is currently applying for 2 more. These patents are a strong fence that will protect DASCO’s future.
Chairman Lee explained that without such technological prowess, it would have been difficult to win in the competition with China, which uses low wages as a weapon.
DASCO suffered a temporary hardship in August and September due to a sharp increase in raw material prices due to the war in Ukraine, but this year’s sales prospects are bright. The company’s sales are steadily increasing, with an average sales growth rate of 17% over the five years, from 13.5 billion won in 2017 to 18.3 billion won in 2018, 20.2 billion won in 2019, 21 billion won in 2020, and 25 billion won last year. In particular, it is expected to reach 45 billion won to 50 billion won next year.
President Lee Sang-kyu hinted, “Since we have already received orders worth about 30 billion won for next year, achieving 50 billion won is not unreasonable.”
The field that will play a role in DASCO’s sales next year is liquefied natural gas (LNG) ship compressors. This is also the result of anticipating technology trends and preemptively responding to them.
In addition, DASCO has built up solid technology by successfully receiving a heat exchanger for an LDC extruder and an extruder for an explosion-proof heater as a national project.
South Korea has won orders for 97 LNG ships this year, including 41 from Hyundai Heavy Industries Group, 28 from Samsung Heavy Industries, and 28 from Daewoo Shipbuilding & Marine Engineering. This is more than the 86 LNG vessels ordered by the world last year. This is why DASCO’s sales prospects are bright even after next year. DASCO seems to be out of the so-called “three intentional” shocks, such as high prices, high interest rates, and high exchange rates.
Along with the increase in sales, DASCO production manpower and additional production sites are secured, and they are in happy troubles to secure funds for this. Due to COVID-19, it is difficult to recruit foreign workers. In addition, Chairman Lee explains that the “52-hour work week” and the “minimum wage hike” suffered considerable damage. In the meantime, we hired 5 experienced employees this year. All of them were recruited from college graduates from the Busan and Gyeongnam regions.
Chairman Lee said, “It was urgent to secure additional production facilities, so we had to rent a nearby factory, but as we were selected as a ‘regional innovation leading company’ this time, the loan limit from the Small and Medium Business Corporation increased to 10 billion won. We plan to purchase a factory with this money,” he said. “It was a big help.”
DASCO currently has relationships with about 70 parts makers and processed goods makers. This means that the development of DASCO will result in the development of each of these 70 or so companies. This is why DASCO was selected as a ‘regional innovation leading company’ by the Ministry of Small and Medium Business.
DASCO is also striving to become a “company that employees love.” The most important part is the sharing of results. The company has been applying for a “performance sharing company” every year since four years ago and thoroughly sharing a certain percentage of the profits promised with its employees.
Chairman Lee said, “Companies must exist for a long time and develop. We, DASCO, will become a company that opens up the future based on advanced technology in the heat exchanger field with core talents who fearlessly take on challenges.”
