In a major push to target the world’s largest power market, Hyosung Heavy Industries said Monday it has acquired Mitsubishi’s American electric power product plant in Tennessee for $46 million.

The Japanese company’s Tennessee plant produces core-type ultrahigh voltage transformers used for the power generation industry. The transformers account for 95 percent of the total demand in the global transformer market, including North America, according to the company.

Hyosung Heavy said the acquisition took into account the rise in US power consumption, renewable energy industry and demand to replace the aging power equipment infrastructure. 

The investment is also expected to help it secure market competitiveness in the US, which is increasing protectionism by imposing 40 to 60 percent anti-dumping duties on imported high voltage transformers, the firm said.

Hyosung Heavy said it has advanced into the US ultrahigh voltage transformer market worth around $1.7 billion since 2011, maintaining long-term partnerships with major domestic power companies.

“Through the acquisition, we will be able to supply products more reliably to customers,” the company’s spokesperson said.

“Our Changwon plant will strengthen its role as a global technology development center. It will focus on producing products in premium markets, including Europe, the Middle East and Asia.”

In the first half, Hyosung Heavy turned to black with sales of $2.4 billion and operating profit of $69 million won, up 22 percent and 14 percent, respectively, on-year. Sales of the heavy industry division was driven by seasonally high demand for high voltage transformers while the power generation division enjoyed highersales of high-voltage motors driven by the expansion of the petrochemical equipment industry.

Hyosung Heavy is among the many Korean companies eyeing the US market.

In September, Taihan Electric Wire won a 230-kilovolt ultrahigh voltage grid project worth around $34 million from a power company in Virginia. In the same month, Daelim Energy and Korea Southern Power Co. began construction of a 1,085-megawatt gas-fired combined-cycle power plant in Niles Cass County, Michigan, with a total project cost of $1 billion.

A consortium comprising Hyundai Engineering, Korea Electric Power Corp. and Korea East-West Power Corp. was named in July to build a power plant worth $534 million -- a 200-megawatt capacity combined cycle power plant in Dededo, northern Guam.

LG CNS was the nation’s first energy firm to be awarded a $43 million contract in 2017 by the Guam Power Authority to deliver, operate and maintain two energy storage systems that combined can deliver 40 megawatts of power output. 

By Shin Ji-hye (shinjh@heraldcorp.com)