Korea“s Hankuk Glass Industries Inc. has an image of being too slow and conservative in a fast-changing world, but the US-educated second generation now running the company wants to change that. This…
Korea“s Hankuk Glass Industries Inc. has an image of being too slow and conservative in a fast-changing world, but the US-educated second generation now running the company wants to change that. This month in an interview with Business Week 30 April, Hankuk announced ambitions to manufacture and sell globally “smart windows“ that, at the turn of a knob, can be adjusted to change the amount of light passing through them. Hankuk is betting some of its future on the new technology, which, it projects, will bring in more than 10% of revenues by 2005. Competitors in Korea and China are eating into the company“s market share and it also must replace business lost in the wake of a slowdown in Korea“s construction and auto industries. As it is, Hankuk expects 2001 sales to drop to US$ 426 million, down from US$ 447 million last year. In smart-window technology, the company seems to have an advantage. Hankuk holds patents on the thin film version of the technology that can be affixed to a variety of products – from office windows to automobile sunroofs to oven windows. The film is to be made at a new, US$ 6.2 million plant in Inchon, 40 km west of Seoul. Says company president Kim Seong Man: “It will give a new dimension to windows in the 21st century. Hankuk originally licensed its glass-dimming technology in 1990 from US-based Research Frontiers Inc. The company“s suspended particle devices (SPD) use electrical current to control the light passing through glass. When the power is off, the windows go dark; gradually increasing the luminosity gives higher transparency. Under the original deal, Hankuk could make and market smart windows only in Korea, but by the mid-1990s, the company had devised the film format, which it can also sell abroad. SPD is a breakthrough because the user can determine exactly how much light gets through. By contrast, the photochromic technology used to cut glare in sunglasses is activated only when exposed to ultraviolet rays – and is not adjustable. What“s more, SPD is far cheaper than rival technologies that control light and shade. A pair of battery-power electrochromic sunglasses costs US$ 1,200 while a sq. m. of Hankuk“s glass costs about US$ 400. The demand for intelligent window technology is expected to soar, and Hankuk is hoping to get major auto makers interested. According to the company, a leading European carmaker is already testing its SPD film. Hankuk also plans to sell to ship and aircraft makers, as well as manufacturers of refrigerators and ovens. As part of its mid-1990s restructuring, the company formed a strategic partnership with France“s Saint-Gobain Group, selling the European glass giant a 32.5% stake in Hankuk Glass. Hankuk also raised US$ 85 million by selling off noncore businesses and used the money to buy out two-thirds of its 6,000 staff. While Hankuk is expecting a high return on its investment in smart glass, it is keeping its projections conservative, at just US$ 60 million in annual sales in five years. If “smart windows“ take off, Hankuk may loose its old-fashioned image.