[Interview] "Achieving 1 Trillion KRW Sales by 2025, Growing into a Global Environmental Company"

Kim Jeongcheol, CEO of Tecros Water & Energy & Tecros Environmental Services
"Positive trends continue domestically and internationally, business expansion accelerating"

Kim Jeong-cheol, CEO of Techcross Water & Energy and Techcross Environmental Services.
[Photo by Techcross Water & Energy]

[Asia Economy Reporter Kim Jong-hwa] Techcross Water & Energy and Techcross Environmental Services are comprehensive environmental companies engaged in sewage treatment, reuse of treated wastewater, waste treatment and energy conversion, and renewable energy projects.

Techcross Water & Energy and Techcross Environmental Services were acquired in September 2019 by their parent company, Techcross, which took over 'LG-Hitachi Water Solution' and 'LG Hi & Tech,' subsidiaries of LG Electronics. Techcross is a global leader in the production of ship ballast water treatment systems and is an affiliate of Bubang Group, widely known for the electric rice cooker brand 'Cuchen.'

While Techcross Water & Energy generates revenue through the design, procurement, and construction (EPC) of sewage and wastewater treatment facilities, Techcross Environmental Services handles the operation and management (O&M) of completed facilities to increase sales. They also generate profits by burning solid recovered fuel (SRF) produced from waste (garbage) at waste treatment facilities (cogeneration plants) to produce or sell electricity.

Domestically, they have constructed and managed a total of 93 sites, including Bucheon Gulpo Public Sewage Treatment Facility and Paju Treated Wastewater Reuse Facility, as well as the construction and operation of Yeonggwang and Gimcheon cogeneration plants and pollution facilities for major LG affiliates. Recognized for their technology in Korea, they are often requested as partners when major companies expand overseas, and they are independently pioneering overseas markets, with the number of overseas sites steadily increasing.

Employees are working hard at 10 overseas sites, including the wastewater treatment facility at LG Electronics’ Guangzhou factory in China, environmental equipment installation at LG Electronics’ North American washing machine plant, cogeneration plant construction in the Maldives, sewage pipeline treatment facility in Nicaragua, final sewage treatment plant in Uzbekistan, solar power facility construction in the Philippines, and sewage treatment facility at an LG affiliate in Haiphong, Vietnam.

Kim Jeong-cheol, former Vice President of Hyundai Construction, is the CEO overseeing both Techcross Water & Energy and Techcross Environmental Services. CEO Kim stated, "Although the combined sales of the two companies remained at 370 billion KRW last year due to the market contraction caused by COVID-19, we aim to stand tall as a global environmental company with sales of 1 trillion KRW by 2025, four years from now."

CEO Kim added, "Recently, the environmental industry has focused on minimizing pollution and reusing (Reuse) or recycling (Recycle) resources, which perfectly aligns with the business direction of Techcross Water & Energy and Techcross Environmental Services."

The combined sales target for the two companies this year is 450 billion KRW, with an operating profit of 10 billion KRW. CEO Kim expressed confidence, saying, "With positive trends continuing domestically and internationally and rapid business expansion, it will not take long to stand shoulder to shoulder with global leading companies."

The market outlook is indeed bright. The IMF (International Monetary Fund) estimates that Korea’s environmental market size exceeds 100 trillion KRW in the era of per capita income of 30,000 USD. The United Nations Environment Forum projects that the global environmental market grows about 3.6% annually, reaching 1.3358 trillion USD last year, and is expected to grow over 7% annually for the next decade, especially in emerging countries in Asia, Africa, and Latin America.

However, the entry of large construction companies into the environmental business and the 'NIMBY (Not In My Backyard)' phenomenon pose variables. Recently, as the global construction market shrank due to the spread of COVID-19, major domestic construction companies such as POSCO Construction, GS Construction, DL E&C, and Hyundai Construction have successively entered the environmental business, causing tension among specialized environmental companies. Additionally, the NIMBY phenomenon, with sentiments like "No construction of nuisance facilities in our neighborhood" and "If built in our neighborhood, only our neighborhood’s waste should be treated," is intensifying.

CEO Kim asserted, "The environmental business initiatives by large construction companies equipped with EPC and O&M capabilities are likely a temporary phenomenon caused by COVID-19," and emphasized, "Environmental projects should be handled by specialized environmental companies with professional technology and know-how."

Regarding the NIMBY phenomenon, he expressed concern, saying, "Expanding waste treatment facilities is a realistic alternative amid the current inability to find additional landfill sites, but NIMBY demands such as 'Only treat our neighborhood’s waste at the treatment plant built in our neighborhood' are obstacles." He urged, "Environmental facilities should be directly managed and supervised by the central government, and residents must demonstrate mature environmental awareness for the future."