A Century of Progress
A century ago in a small rural village located in Gangwon Province, the Sang Dong Tungsten mine was opened. A century later the seed that was planted has grown into a success story.
Roughly 50 years after the company started its operations, the Korean government realized the mine’s importance and founded the Korean Tungsten Corporation (KTC) in September 1952.
During the Korean War through the 1970s, KTC became a pivotal player in the South Korean economic miracle. In the 1950s, KTC exported US$16.5 million worth of tungsten which accounted for 56 percent of Korea’s national exports.
From 1959 through 1979, the company’s growth was phenomenal; a chemical processing plant was built moving KTC up the tungsten processing value chain. The early 1960s saw three overseas offices established in London, New York and Tokyo.
For three different years in the 1960s, KTC was officially commended by the Korean government for being one of the top three exporters earning foreign currency – an important factor because the company continued to help fuel the nation’s growth.
During the 1970s, KTC’s footprint grew with new overseas offices and, in 1974, the opening of the Daegu manufacturing campus, its current home.
In 1968, KTC partnered with the Korean government to create POSCO, a joint venture that saw a 75 percent investment by the Korean government and a 25 percent investment by KTC. At the helm of the new Korean steel company was former KTC president Park Tae-jun. As of 2014, POSCO has become one of the top five global steel manufacturers.
The 80s witnessed South Korea’s industrial conglomerates diversify their industrial manufacturing base by investing heavily into the growth of sectors namely shipbuilding, automobiles, electronics and DRAM (Dynamic Random Access Memory) computer chips. Today, the synergy of these products coupled with the nation’s most valuable resource, its people, produce goods that are synonymous with technologically advanced, well-built products sought after the world over.
In response, KTC supported these bold projects by introducing a special coating substrate in 1981 and, by 1985, the company developed Cermet inserts that combine ceramic and metal alloy in order to machine tougher-to-cut materials.
On the industrial application side, by 1989, two plants were built; one for the production of tungsten wire used in the lighting industry such as filaments and for carbide rolls used in steel manufacturing.
In 1991, the evolution of the cutting tool continued when KTC began manufacturing ceramic cutting tools which brought a whole new level of production into the local and global markets.
Later on, in 1998, a year after the Asian financial crisis almost crippled many countries in the region, KTC was acquired by the IMC Group – the parent company of Iscar, one of the largest cutting tool companies in the world – and became TaeguTec Ltd. and a new road was started; a road that put the oldest metalworking company with the youngest brand in manufacturing facilities all over the world.
Ever since then, the company has continued to expand its global presence by investing in its people and the newest manufacturing processes that create some of the highest quality cutting tools and industrial products in the business.
Mr. Ryu Jae-won, the current vice-president of Marketing Support, who joined KTC in 1978 states the company’s importance to the Korean economy was two-fold, “KTC and a handful of companies were responsible for financing the country’s growth through exports.”
KTC was the worlds’ only integrated tungsten producing company possessing high technical know-how but sales margins were low.
It was imperative to enter the cutting tools field Mr. Ryu remembers, “In 1974, the Daegu campus was built and from 1976, we began to learn about cutting tools.” This culminated in the 1980s with the development of the company’s own cutting tools line.
ISCAR also had a part in the evolution of KTC. The Israeli company had agreements with KTC since the 1970s and when the opportunity to acquire the company came along, it was an opportunity that could not be ignored.
For Mr. Choi Chang-hee, the current Research and Development and Technical Manager and another KTC veteran said that the post 1998 events impressed him the most, “After being acquired by the ISCAR led group (IMC), that is when TaeguTec really began to shine.”
Mr. Choi highlighted that sales grew from $100 million in 2005 to $300 million in 2012.
Further, ISCAR’s global footprint led to a process where “we learned much by learning new ways to improve our brand,” Mr. Choi added.
With all these factors in play and a growth of a conglomerate and company continuing to increase its market foothold in several key countries, investors took note.
One investor that saw the value and tremendous growth potential of IMC and all its companies like TaeguTec, Iscar, Ingersoll and Tungaloy, just to name a few, was Warren Buffet of Berkshire Hathaway who purchased 80 percent of IMC shares in May 2006. But that was only the first step because in May 2013, the “Oracle of Omaha” acquired the remaining 20 percent.
Mr. Ryu believes that being part of a larger group gives the company flexibility to ride out economic recessions and adapt to changes in the cutting tool field.
Impact on Daegu
Selecting Daegu as the manufacturing campus was important for the city and surrounding areas, “back in 1974, KTC selected Daegu due to the proximity of another mine,” Mr. Ryu explained. In 1998, ISCAR believing that the TaeguTec headquarters should be closer to the nation’s manufacturing facilities and did not purchase the Seoul headquarters.
To the vice-president, that meant that TaeguTec serves as an anchor for industry in the Daegu metropolitan area. In April 2012, this investment was renewed with the inauguration of a new plant at the Daegu campus.
Looking back, a mine has morphed into a global cutting tool and industrial products provider. As KTC, it played a key role in Korea’s economic miracle and gave the people a symbol of what Korea can do when people and government come together to create something truly special.
As TaeguTec Ltd., the company continues to serve as a force in Daegu’s economy and anchor for further investment. This is a role it is determined to play for the next one hundred years.