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Iljin Electric Co., the South Korean heavy electric equipment producer, has clinched its largest-ever order, totaling 431.8 million won ($333.2 million), to supply high-voltage transformers to a prominent US energy company. The momentous deal, shrouded in confidentiality regarding the US client's identity, will see Iljin Electric delivering 15 different types of transformers, including 345-kilovolt variants, along the East Coast from 2026 to 2030. Notably, this marks the single largest order for Iljin Electric since its establishment in 1968, ensuring full-scale operations at its transformer factory until 2026.
This strategic move has prompted Iljin Electric to announce plans for a significant boost in production capacity, aiming to manufacture transformers worth 433 million won by 2026, compared to the current 260 million won as of end-2023. The ambitious expansion is fueled by anticipations of increased demand for heavy electric equipment orders from the US. The surge in investments for replacing aging power-generating infrastructure and constructing new renewable energy power plants, driven by the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, has created a lucrative market for companies like Iljin Electric.
The growth in the US power generation sector, predicted to rise by 32% from 2023 to 1,543 gigawatts (GW) by 2030 according to the US Energy Information Administration, is a key driver for the surge in demand for transformers. With approximately 70% of large transformers in the US surpassing the 25-year mark, approaching the average lifespan of 30 to 40 years, there is a compelling need for replacements. Iljin Electric's successful bid not only secures its pivotal role in the evolving US energy landscape but also aligns with the broader industry trend towards modernizing and enhancing power infrastructure.
Despite this monumental achievement, Iljin Electric's stock on the Kospi edged up only marginally, closing at 13,690 won on Tuesday, reflecting a measured response from the market.
Source: kedglobal.com