Han Seung-il, Chairman of AR
As the demand for semiconductors and data centers surged due to Corona 19, there is a product that suffered a good wind. It is a’thermo-hygrostat’. A thermo-hygrostat is an industrial equipment that keeps indoor temperature and humidity constant, and has all four functions: air conditioner, heater, dehumidifier, and humidifier in one unit. In particular, all data centers, corporate computer rooms, and semiconductor production lines must maintain a temperature of 22 to 24 degrees and a humidity of 45 to 50%, so it is essential to install a thermo-hygrostat.
Thermo-hygrostat manufacturing market jumped into vehicle rollover accident
AR, located in the Sihwa National Industrial Complex in Gyeonggi Province, is the No. 1 thermo-hygrostat manufacturer in Korea, with a market share of 30 to 40% in Korea. It also sells industrial coolers, air conditioners, clean rooms, dehumidifiers, and humidifiers. What if there is no thermo-hygrostat, which is a’advanced equipment protection product’? Data centers that require hundreds of servers to operate 24 hours a day, 365 days a year will frequently cause fires due to short circuits in spring and summer and static electricity in autumn and winter due to enormous power and heat. The same goes for the computer room. In the case of semiconductors sensitive to temperature and humidity, production itself is impossible without a thermo-hygrostat.
The domestic thermo-hygrostat market was dominated by the US and Japan until the early 1980s. Chairman Han Seung-il, who founded AR in 1981, was only doing maintenance work for thermo-hygrostat at the time. He entered the manufacturing market because of an accident in a US-made thermo-hygrostat imported from Samsung Electronics’ Suwon plant in 1983. When the US-made thermo-hygrostat was damaged to the extent that it was difficult to recognize the shape due to a sudden overturning of a transport freight vehicle, Samsung Electronics struck SOS on the chairman. Chairman Han was the best expert in Korea, who also earned a reputation as an instructor in the air-conditioning field with a mechanical engineer’s certificate, which was selected only three people a year in the country. Chairman Han went to the tool shop in Guro-dong, Seoul, and Akihabara, the electronics shop in Tokyo, Japan, to carry out parts, and after working all night, he looked at the product manual and made the same product. He thought, “I can make enough of this,” so he switched to manufacturing, and in 1985 delivered his first product to the Seoul branch of Bank of America (BOA) in Taepyeong-ro, Seoul.
Quality recognized by Samsung, SK, LG, and Lotte… Area that extends to hospital operating room
With favorable reviews from the market, AR products have begun to regain the market for thermo-hygrostats for computer rooms, data centers, and production plants for each company that foreign products have occupied. Major suppliers are large corporations such as Samsung, SK, LG, Lotte, POSCO, Shinsegae, and KT, as well as global corporations such as banks, insurance companies, and securities companies, IBM Microsoft, GE Siemens, Philips Hewlett-Packard and Sony. Demand for computer tomography (CT) and magnetic resonance equipment (MRI), as well as operating rooms of hospitals sensitive to temperature and humidity, has increased, and’Big 5’hospitals such as Seoul Asan Hospital, Samsung Seoul Hospital, Seoul National University Hospital, Severance Hospital, and Seoul St. Mary’s Hospital Are all supplying. In recent years, the area is expanding to museums, archives, wine cellars, and food processing factories. Chairman Han said, “An optimum temperature and humidity are required for long-term storage of relics and documents. In confectionery factories that need a crispy taste, the humidity should be as low as 30%, and on the contrary, in the wine cellar, it should be as high as 80%.” He explained.
The company recorded an operating profit surplus for 40 years from its establishment until last year. During the 1997 foreign exchange crisis and the 2008 global financial crisis, the company’s annual sales growth rate reaches 10-20%. Even last year during the corona crisis, sales recorded 70 billion won, an increase of 16.6% (10 billion won) from the previous year (60 billion won).
Energy-saving thermo-hygrostat made by AR. AR offer
The secret that a Korean small and medium-sized company could take the market away from large foreign companies is the analysis of’constant research and development’,’work innovation’, and’quick after-sales service (AS)’. Chairman Han invests 5-10% of sales annually in R&D and has acquired more than 100 patents so far. In particular, in terms of energy saving, the company developed the technology to save energy by recycling the waste heat thrown away from the outdoor unit and controlling sensible heat (heat generated by temperature change) and latent heat (hidden heat used in state change). It is an evaluation that it has global technological competitiveness. Chairman Han was convinced that “in Asia, there is no company with its own technology and production capacity like ours, and in terms of quality, we are standing shoulder to shoulder with world-leading companies such as Vertiv in the US and Schneider in Germany.” Another characteristic of the company’s management is that all 120 employees are allowed to present ideas such as product technology, business innovation, and service improvement once every three to four months. Instead, the rewards are great. In the case of cost reduction measures, 10% of the total cost reduction amount is provided as an incentive to the initial proposer. As for the AS, all the products sold are connected to the network, allowing immediate remote response in the event of a breakdown, and a 24-hour dispatch system at 10 branches across the country is receiving favorable reviews from companies.
Turnover rate is virtually 0%, retirees at the retirement age 100% are hired… Retirees write to the end
Another strength of the company is that its turnover rate is close to 0%. Retired retirees were also 100% re-hired as technical and production advisors. Chairman Han introduced, “There is no employee who does not go to the company among the initial members. AR is distributing the performance of sales to its employees. Even in the coronavirus outbreak, incentives of 400% of the basic salary were paid to all employees last year, and exceptional incentives of up to 1900% were paid to some employees. Chairman Han explained the purpose of the system, saying, “The number of employees who have paid more than me this year also reaches 3-4,” and “to ensure that employees are motivated”. The company’s characteristic is that retirees are also responsible for the end. It has a’small boss’ system, and is considerate to work as a technical and production advisor even after retirement.
AR Chairman Han Seung-il (second from left) is taking a commemorative photo after installing the company’s thermo-hygrostat in the parent company’s data center. AR offer
Chairman Han said, “Our goal is to record 80 billion won in sales this year, an increase of 10 billion won from last year by expanding our business areas and expanding exports,” and predicted that “in 2023, sales will exceed 100 billion won.” As the demand for renewable energy generation has recently increased, AR is also expanding its exports to refrigeration and air conditioning facilities for energy storage (ESS). In recent years, exports worth tens of billions of billion won were made to Texas, the United States, following the Philippines in the UK. AR, which built a smart factory in 2019 with the help of Samsung Electronics and the Ministry of SMEs, plans to increase production by 20% by expanding and renovating factories in the Sihwa National Industrial Complex from July to August for production innovation.
Chairman Han Seung-il, who graduated from Chuncheon High School and Kangwon University’s Department of Forestry, served as the Chairman of the Federation of Korean Machinery Industry Cooperatives (February 2007 to February 2011). He received the Gold Tower Order of Industrial Service Merit in 2018, and was selected as “Machine of the Year (industry)” by the Korea Machinery Industry Promotion Association in 2019. AR was also selected as an excellent quality competitiveness company by the Ministry of Trade, Industry and Energy for 19 consecutive years until last year.
Reporter Ahn Dae-gyu [email protected]