[BizLeader] Park Chang-ho, CEO of SG, "World's First Ukraine Steel Ascon Patent to Secure Market Lead"

Building Trust with Ukraine as a Global Corporate Entry Barrier in Patent Registration... A Stepping Stone for a 1000 Trillion Reconstruction Project

Park Chang-ho, CEO of SG, is inspecting the DS Prom plant of Ukrainian Ascon company, with which a contract for consignment production has been signed. / Photo by SG

"As the first global asphalt concrete (ascon) company, we have filed a patent in Ukraine for Eco-Steel Ascon, a technology that produces ascon using steelmaking slag. This patent is expected to serve as a barrier to entry for multinational companies from countries such as the United States and Japan."

Park Chang-ho, CEO of SG, Korea's number one ascon company, recently explained this to Asia Economy regarding the patent application for Eco-Steel Ascon in Ukraine. Eco-Steel Ascon is made using slag, a byproduct of steelmaking, instead of the conventional raw material, aggregate (stones).

While utilizing waste materials, Eco-Steel Ascon offers advantages such as higher strength and durability compared to traditional ascon. In Korea, it is already being used for paving the Second Gyeongbu Expressway. After nine years of research, SG became the first company in the Korean ascon industry to obtain a domestic patent for Eco-Steel Ascon.

CEO Park said, "Although advanced countries like the United States, the United Kingdom, and Japan have similar products to Eco-Steel Ascon, they have not yet entered Eastern Europe. SG filed the patent first while maintaining continuous contact with the Ukrainian government despite the wartime situation to secure the Ukrainian market ahead of others."

Park Chang-ho, CEO of SG, is having a discussion about Ecossteelascon production with Andrey Nazarenko, head of SG Ukraine (SGU), and local officials. / Photo by SG

SG filed the related patent in Ukraine last May. Typically, patent registration in Ukraine takes two to three years after application, but the company expects expedited processing thanks to full support from the Ukrainian government. If SG’s patent is registered first, global companies will find it difficult to produce steel ascon-related products in Ukraine.

Ukraine’s strong interest in Eco-Steel Ascon stems from its status as a steel powerhouse. The country has struggled with disposing of steelmaking byproduct slag. Disposal costs are high, so slag is piled up like mountains in open fields near steel mills. Ukraine aims to achieve a twofold effect by using SG’s Eco-Steel Ascon technology to both process slag and pave roads.

CEO Park explained, "We previously signed a 10-year contract with Metinvest to supply 42 million tons of slag free of charge, and during this visit, we signed an additional MOU with the PFK steel mill to supply up to 600,000 tons of slag annually. Being able to receive slag locally enables mass production of Eco-Steel Ascon and enhances price competitiveness."

Metinvest is the parent company of Azovstal, Europe’s largest steel mill located in Mariupol, Ukraine, with annual sales reaching 9.15 trillion KRW. PFK, with which the additional slag supply MOU was signed, is also a large steel mill with annual sales of 3.72 trillion KRW.

SG plans to produce Eco-Steel Ascon at DSProm using this slag. DSProm is the leading local ascon company in Ukraine, operating six factories. At the end of last month, SG signed a consignment production contract with DSProm. Currently, SG’s total orders related to Ukraine’s reconstruction projects amount to approximately 40 billion KRW, and this volume will initially be handled through DSProm.

The first project will be on the P06 highway in Mykolaiv province in southern Ukraine. This highway connects to Kirovohrad province in the central region, spanning about 230 km. SG plans to pave 1 km with conventional ascon and another 1 km with Eco-Steel Ascon to conduct a quality comparison evaluation. If the test paving proves successful, Eco-Steel Ascon will be applied to the entire 230 km stretch. The design phase is underway, and test paving is scheduled for July to August.

Park Chang-ho, CEO of SG, is introducing the slag and products used in Eco Steel Ascon. / Photo by SG

CEO Park said, "Since the quality has already been verified domestically, the evaluation should pass smoothly. Once this test paving is completed, we expect additional orders to pour in." He added, "Experts estimate the scale of Ukraine’s reconstruction projects to exceed 1,000 trillion KRW, with a high proportion allocated to social overhead capital (SOC) reconstruction such as roads and ports. Especially since ports were not attacked, more funds are expected to be invested in road reconstruction. SG is striving to secure this opportunity."

To prepare for the anticipated surge in orders, SG plans to acquire a local factory in Ukraine using funds from this capital increase. Due to the nature of ascon, factories need to be located near paved roads, so SG is scouting for key regional factories.

CEO Park stated, "For a mid-sized company like SG to participate in large-scale reconstruction projects, it is necessary to prepare ahead of others. SG’s early test paving locally will send a strong message to Ukraine that Korea was the first to help." He continued, "Despite the difficult circumstances of war, we are building trust with the Ukrainian government and deepening our relationship to lay the foundation for even larger projects in the future."