In winter, many Koreans are reminded of a heartwarming TV commercial. The ad shows an old man enduring the cold winter in a remote village. Against the background, a woman’s warm voice says, “Honey, we need to install a boiler in your father’s house.” The ad shows children worrying about their parents who may stay too cold throughout the winter due to heating costs. The commercial actually promotes boilers made by Kyung Dong Navien, a manufacturer of oil and gas boilers. The company’s emotional ad touched the hearts of many viewers in the 1990s, and its outstanding technology is now enhancing the reputation of Korean boilers overseas. This year, the company became the nation’s first boiler manufacturer to receive the 200 million US dollars Export Tower award. Let’s hear from Lee Jae-yong, head of the company’s Overseas Sales Department.
The company was set up in 1978. The company’s history itself shows how the boiler business in Korea has evolved. It has been behind many “firsts” in the industry, which have changed the overall paradigm of heating solutions. In 1979, the company launched the first compact rectangular oil boiler named Corona. In 1988, it became the first company in Asia to develop and produce condensing boilers, opening the era of environmentally-friendly heating equipment. In 1997, it released the first remote control boiler model. In 2006, it launched the first hot-water centered boiler called “Navien new condensing onsoo.” Before this model, heating was the main purpose of boilers. But with the new product, the focus was shifted to hot water in line with the changing trends in consumers’ lifestyle. In 2013, the company designed a boiler with a smartphone remote control system. And it also became the world’s fourth company to develop a home boiler powered by electricity, presenting the vision of what future boilers will be like.
Kyung Dong Navien’s predecessor was “Briquette Wangpyo” that was established by the late Sohn Do-ik in 1967. The company has set new records for the last four decades since it was founded in 1978 in the name of Kyung Dong Machinery. Starting with the development of the nation’s first compact rectangular oil boiler in 1979, it released condensing boilers through technical cooperation with Nefit of the Netherlands in 1988. In the 1980s, the domestic boiler market saw rising demand for oil and gas boilers, partly due to falling oil prices. But the company didn’t simply follow the trend but focused on research and development on how to reduce harmful gas that was emitted when the boiler was running. As a result, it successfully launched Asia’s first condensing boiler, which does not release the heat from the emissions right away but uses it once again to increase heating efficiency while significantly reducing carbon dioxide emissions. Later on, the company was able to increase energy efficiency of condensing boilers by up to 98.8 percent through constant technology development. Kyung Dong Navien turned its eyes to overseas markets.
We are also the first Korean boiler company to make inroads into foreign markets, such as China, Russia and the U.S. I believe we laid the solid foundation for boilers, which had mostly targeted the domestic market before, to become a promising export item. Our goal was not simply to earn profits but also to expand the use of condensing boilers to make a contribution to society. The condensing boiler can reduce energy use by up to 28.4 percent and lower the level of nitrogen oxide, which is the cause of fine dust, by one-fifth. Also, it drastically cuts carbon dioxide emissions, which contribute to the greenhouse effect. In a word, condensing boilers are essential in modern society. Our condensing boilers have already been in general use overseas, as they gained recognition from global consumers for their quality and technological prowess.
Unlike South Korea, where the condensing boiler distribution rate remains at 20 percent, Europe began to adopt an environmentally-friendly boiler policy in the 1980s and the ‘90s. Foreign markets were a genuine test bed for this Korean boiler company armed with the world’s best condensing boiler technology. In 1992, the company exported gas boilers to China as the first Korean firm to do so. At present, its products are shipped to some 30 countries around the world, including North America, Russia and Europe. The company’s exports account for 52.6 percent of its total sales in the first half of this year. What is the secret of the company’s successful advance into the global market?
In fact, it is far from easy to export boilers, which use various elements, such as water, fire, gas or oil. Countries have their own environment and infrastructure for installing heating systems, and heating culture varies a lot from region to region. It is necessary to figure out exactly what customers in each country want and to provide them with the best possible products. So, Kyung Dong Navien is making efforts to offer heating solutions tailored to the needs of different countries, based on the performance, quality and technology of its products. In North America, for example, gas pressure is rather low due to outdated gas pipelines. But we were able to penetrate this market by developing technology that enables boilers to run even under low gas pressure. In Russia, our products have become a well-known brand, thanks to the technology of controlling boilers in the face of inconsistent voltage and strong winds.
Kyung Dong Navien’s boiler models can be produced in different ways, in consideration of the different conditions of each country. The company has acquired the European CE Certificate as well as the American ASME Certification. It also earned the highest four-star rating in terms of thermal efficiency. Quality is another key element to expand export destinations. In South Korea, many companies usually operate 24-hour call centers all-year round. In contrast, it is hard to provide quick after-sales services in large countries, such as the U.S., Russia and China. That’s why the company has made its best effort to produce top-quality, trouble-free products that would operate consistently. The relentless efforts enabled the company to make remarkable achievements.
KD Navien is leading the trend for eco-friendly products with its condensing technology in the water heater market in North America, which has an annual market size of more than 10 million units. We entered the instant water heater market rather late, as the market had been dominated by Japanese brands, such as Noritsu, Rinnai and Takagi. But we changed the paradigm of the market completely. Currently, global firms are chasing KD Navien, which takes the top position in the market. Its huge popularity in Russia is definitely worth mentioning. Last year, KD Navien was selected as the best brand in the gas boiler category in the Russian consumers’ vote, beating other European makers. It has also maintained the top spot in the market of wall-mounted boilers, which are prevalent in Russia.
The company has ranked first in the North American condensing water heater market since 2008 and has retained its No.1 ranking in the Russian wall-mounted gas boiler market since 2011. It is also exporting its products to Britain, the home of condensing boilers, to expand its export market to the whole of Europe. Next year, it will accelerate its efforts to sell its products overseas.
KD Navien’s advancement to the global stage will continue next year. It will keep the growth momentum in the North American market, where it has already established itself as a market leader. Based on our brilliant performance in Russia, we’ll expand the market into the Commonwealth of Independent States as well. We’re ready to take a step closer to Chinese consumers and reclaim the top position in the Chinese boiler market, which grows considerably each year. We’re preparing to set up a factory capable of producing 300-thousand units in Beijing next year. Construction will be completed very soon. We’ll move past the glory of the 200 million dollars Export Tower award and advance to a larger stage.
Since its establishment, the company has endlessly developed the industry’s first products to open an era of boiler exports. In 2011, it received the 100 million dollars Export Tower award. This year, it won the same Export Tower award, but the figure doubled to 200 million dollars. KD Navien will surely retain its status as Korea’s representative boiler company and a global leader in condensing technology.