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Nov 02, 2024

Sanil Electric Leads Transformer Revolution - Newsweek

America is currently in the midst of a transformer super cycle. In the short term, a 2020 study by the United States' Department of Energy reported that 70 percent of the country's distribution

America is currently in the midst of a transformer super cycle. In the short term, a 2020 study by the United States' Department of Energy reported that 70 percent of the country's distribution transformers are nearing the end of their lifecycle, highlighting the fact that they are some of the oldest in the world. For the mid to long term, booming demand is expected to follow for specialized transformers in renewable energy projects, artificial intelligence-driven data centers and charging stations for electric vehicles (EVs).

As the U.S. embarks on this super cycle, Korean companies like Sanil Electric are well positioned to capitalize on this expected surge in demand. Established in 1987, the company has steadily built a reputation for producing special-purpose transformers. Dong Suk Park, president of Sanil Electric, shares his insights on how his company is navigating this pivotal moment in the industry.

"Our global expansion has been instrumental in our success," Park says. "We began focusing on international markets in the early 1990s, starting with Japan, and today, more than 80 percent of our revenue comes from overseas clients." There is a clear understanding that companies must meet the stringent requirements of global corporations to stay competitive, a goal Sanil has consistently achieved through its emphasis on advanced technology and quality.

"We see the aging transformers as a significant opportunity for our company," the president states. "In general, there is increasing investment in renewable energy in the U.S. market, which we believe is moving in the right direction."

Sanil Electric's ability to innovate and adapt to these emerging markets stems from its history of specializing in special transformers for niche applications, such as vessels, railways and petrochemical industries.

"We intentionally avoided the general transformer market, where competition was fierce, and focused on our specialized products," Park explains. This strategy has not only differentiated the company but also led to long-term partnerships with top-tier clients like General Electric, TMEIC and Siemens. And in recent years, Sanil's expertise has allowed it to expand into those growing new markets of renewable energy and data centers, both of which require highly efficient and environmentally friendly transformers.

"Developing a single model typically takes around two years," Park says. "Throughout this extensive process, it has been our company that consistently delivered results." By responding to challenging specifications and stringent environmental regulations, Sanil Electric is positioning itself as a key supplier in these sectors, with sustainability being one of the company's latest innovations, something seen as a critical factor in today's energy landscape.

"The aspect of being green is to manufacture highly efficient transformers. By making them fault-free, we can extend their lifecycle from 20 years to 30 or even 40 years, thereby reducing overall energy consumption," Park explains, with obvious ramifications for the wider society. In addition, the company is using vegetable oils that minimize environmental damage in the event of a leak, addressing both efficiency and environmental concerns. Then there is Sanil Electric's focus on advanced markets like Japan and the U.S., which has been pivotal to its growth.

"About 25 years ago, we signed deals with Toshiba and Mitsubishi," Park recalls. "Focusing on the Japanese market helped us gain the confidence of these companies, leading to long-term partnerships further afield." These relationships have allowed Sanil Electric to push the boundaries of transformer technology, as evidenced by its work with GE. It was around 15 years ago that GE made contact to explore business partnerships, recognizing the company's expertise in special transformers.

Another cornerstone of the company's strategy is its commitment to research and development, and as Park says, "We need to focus on not wasting energy and optimizing energy consumption," emphasizing the importance of developing technologies that align with the global push toward sustainability. For example, Sanil's transformers are designed to optimize energy consumption by reducing the initial energy usage of motors by 50 to 60 percent, a critical feature for industries looking to minimize their carbon footprint.

As renewable energy and EVs continue to gain momentum, Sanil Electric is also exploring the potential of vehicle-to-grid (V2G) technologies, which allow EVs to store and supply energy to the grid.

"Integrating all these EVs creates a massive energy storage system," Park explains. "When you connect these vehicles to the grid to exchange energy, it effectively becomes an enormous energy storage device."

Looking ahead, Sanil Electric is well-prepared to meet the growing demand driven by the aforementioned U.S. transformer replacement cycle and the expansion of renewable energy and EV infrastructure. The company's decision to go public this summer was a testament to its ambitions.

"We were listed on the Korea Stock Exchange on July 29, 2024, a move that will enable the company to invest in capital expenditures, workforce development and technological advancements, all of which are necessary to meet the increasing global demand for its products," Park says, with a clear message about being open to hiring international personnel.

Sanil Electric's growth trajectory over the past few years has been impressive, with the company nearing the completion of a second plant that will double its production capacity. With significant investments into it being made, this expansion is believed to be crucial as the company continues to secure more orders from established partners in the U.S. and Europe.

As Park reflects on his tenure, his focus remains on building a strong, competitive company that is well positioned for future growth, on the back of its 37-year history.

"I hope that our next generation of executives uphold this business philosophy to ensure our continued strength in the market," the president concludes.

For more details, explore the website at: https://www.sanil.co.kr/en/

All interviews were conducted by The Worldfolio and can be found at www.theworldfolio.com.

This article has been paid for by a third party. The views and opinions expressed are not those of Newsweek and are not an endorsement of the products, services or persons mentioned.