After having several discussions over professional social media site Linkedin, I finally get to meet Baruch at EMO 2017 in Hannover, Germany. The YG-1 booth at EMO was a stop for fellow industry professionals who were looking for new technologies, while I was having the below discussion with Baruch. In our 15 minute conversation, he spoke about the company, its vision, R&D activities, market trends and plans for the Indian market. Excerpts …
Tell us about YG-1…
Founded by Hokeun Song in 1981, YG-1 has grown tremendously over the years. Today it is recognized globally as one of the top cutting tool manufacturers. YG-1 has been a leader of round tools in the cutting tool market not only in terms of quality but also in quantity. We are top when it comes to end mills and produce more than 30 million end mills a year. YG-1 also boasts of producing more than 24 million taps, over 60 million drilling tools and 36 million indexable inserts a year.
When the company was established, our founder had a vision—to become the largest manufacturers of round tools. Now, we aim to become the largest cutting tool manufacturers in the world.
We are a global company with more than 5000 employees from various countries. Our sales turnover is more than 550 million growing at the rate of over 30% Y-O-Y. We have 28 manufacturing facilities around the world, most of them in Korea. Apart from that, we have a huge set up in China and recently started a new facility in India. YG-1 also has production facilities in USA, Canada, Brazil, Germany, and Italy.
YG-1 aims to become No. 1 in cutting tool business, but there is tough competition from several established players. What will help you attain the top spot?
One of the biggest reasons why we are growing so fast is that because we have some of the most qualified engineers from around the world. As per our company philosophy, we hire the best talent from around the world. We invest a lot in skill development and new technology. Our motto is to save our customers money by reducing cycle time and wastage. Our most of the R&D expenditure goes into finding out solutions for some of the challenges our user industry faces.
What are the trends you witness in the manufacturing industry or expect to see in the coming days?
The market is changing rapidly. It’s not only based on steel and its alloys anymore, now everyone is looking for new materials and composites that can increase efficiency. We are focusing on finding newer materials that will suit the requirement of different industries. YG-1 is focusing on producing the new generation of products with new coating and carbide grades to improve the productivity.
Another area that is growing very fast is 3D printing, but in my opinion, it will take some time to gain momentum in the mainstream manufacturing technology. Also, it can’t replace the machining activities entirely. It’s not cheap enough for mass production. However, it will certainly gain acceptance in the coming years.
Another industry that is changing very rapidly is automotive, for example, electric cars. The emergence of electric cars would reduce the number of parts which is challenging for machine tool industry. Apart from this, to manufacture battery companies are using carbide, which would make the cost of carbide costly in future.
Tell us something about your R&D activities…
R&D is the core of our business; we emphasize a lot on new product development. We invest close to 8% of our overall expenditure on R&D activities which is one of the highest in the industry. Last year we invested more than $60 million on R&D and product development.
What’s the reason behind the growth and emergence of Korean companies?
Ambition! Korean companies are very ambitious and put lots of emphasis on research activities. Also, the local automotive industry is very strong, which provides a strong boost to machine tool and component manufacturers in the country.
Please share with us your plans for the Indian market…
We believe in the potential of the Indian market and that’s why we are continuously investing in the country. Recently we started our manufacturing facility in India. We feel it is on its way to becoming one of the strongest markets in the world. India has huge potential to grow with its growing infrastructure, automotive, aerospace and energy industry. Also, India has the right set of talent, who are good technically and in communication which is one if the biggest reason for us to invest in the country.