Air-conditioner maker hopes for winter profits

Industry

Published: 05 Oct. 2016, 20:13

Air-conditioner maker hopes for winter profits

Kang Sung-hee, chairman of Autech Group, plans to extend air-conditioner subsidiary CLK Corporation’s summer success with a dual home air-conditioner/space heater and a commercial boiler system during the year’s second half. [CLK Corporation]

When Kang Sung-hee, head of air-conditioner manufacturer CLK Corporation, visited Japan last year, he saw an air-conditioner at an electronics store that allowed a user to choose from over 10 levels of air volume.

As soon as he returned to Korea, Kang sought to best that number.

In February, the company released a line of air-conditioners with 18 levels of air volume control, to date the largest number offered by any air-conditioner in the world. The product line’s two main models, the Aero 18-step and Jet 18-step air-conditioners, are also the first to offer air-filtering and dehumidifier functions independent of air-conditioning.

“Nowadays, the consumer trend is going toward people with more niche tastes and stronger individual preferences,” Kang said. “I thought the same concept would be applicable to air-conditioners.”

Aero 18-step air-conditioner

His expectations proved correct. CLK’s revenue during the year’s first half totaled 233 billion won ($200 million), leading to 5.9 billion won in net profit. Sales soared 55 percent between June and August, when Korea saw one of its worst heat waves in decades.

Looking to extend its run into the winter months, the company is banking on its Inverter Hybrid Boiler System for commercial businesses as well as a recently released dual home air-conditioner/space heater that offers multiple settings similar to the Jet 18-step air-conditioner.

The Inverter Hybrid Boiler System was No. 1 in sales in the Korean commercial boiler market last year. The company attributes the product’s success to its cost-saving technology.

CLK began exporting the system to Greece and China last year and to Turkey this year. The company has plans to expand to the Commonwealth nations and new regions in China during the fourth quarter.

Last week, CLK entered the mini-refrigerator market with its Karwind brand. The products vary in size from 90 to 168 liters. Boosted by the growth in single-person households, the market size for mini-refrigerators is estimated to be around 100 billion won.

Kang, the chairman of Autech Group, which owns CLK, began his career in 1983 at a Kia Motors subcontractor and established Autech Group in 2000. He expanded the group to five subsidiaries engaging in refrigerator, touch-screen and specialized-car (i.e. ambulances and refrigerated trucks) manufacturing.

The group acquired the Korean operation of American air-conditioner manufacturer Carrier in 2011 and established CLK Corporation. In the first year, the company was able to turn its losses into a surplus. Kang’s goal is to have the company see 30 percent revenue improvement every year, as he invests a yearly average of 10 billion won into research and development.

Kang hopes to develop CLK into a company that specializes not only in household air-conditioners but also new technology associated with heating and ventilation. Last June, the company installed technology called AdvanTE3C in the International Financial Center building in Yeouido, western Seoul, which helps manage energy-saving.

“Our plan for exports is to raise their proportion of total revenue to 25 percent by next year and 50 percent within the next three to four years,” Kang said.

BY CHOI YOUNG-JIN [song.kyoungson@joongang.co.kr]