Otis to cater to Korean needs

Patrick Blethon, president, Pacific Asia area, Otis Elevator

Regional head vows to strengthen localization strategy

By Kim Yoo-chul

Otis Elevator, the world’s leading elevator manufacturer, will expand its presence in Korea by increasing investment and sales, according to the head of the firm’s Asia Pacific region.

In a recent interview with The Korea Times at its Seoul office, Patrick Blethon, president of its Pacific Asia area, said the firm will seek to pursue sustainable growth here by capitalizing on its highly-competitive maintenance portfolio and deeply-rooted localization strategies.

“We are pushing Korea to the next step in terms of growth,” Blethon said.

In 2012, Otis achieved 100,000 maintenance units, which he said is one of the biggest maintenance portfolios, globally.

He said as elevators get older, maintenance and (technology) updating have become the industry’s new trend, making it possible to capture more revenue in the service business.

Otis is leading the trend with an advanced call center and monitoring room for high-end elevators.

Its Korean unit earned approaching 1 trillion won in revenue last year. The company expects its Korean arm to see double-digit revenue growth this year.

“I think we have some opportunity because the first quarter of this year has been very good. During the first three months, it was double-digit on the new equipment side of business, which basically goes into new building,” Blethon said.

Blethon said the sluggish local real estate market possibly poses some threats; however, those uncertainties will have very minor impact on its local business as Otis is the leader in the sector.

The elevator business is similar to that of semiconductors, solar cells and shipbuilding in terms of its growth cycle.

This means profit and revenue is dependent upon macro-economic moves. When the economy is better, the elevator business becomes less volatile and cyclical thanks to a rising demand for construction-related projects.

One of the key factors for the elevator manufacturer’s success here, according to the executive, is that Otis is applying a localization strategy.

“We have a recipe for many years. We have a local Korean team. It is a Korean organization. We have a foreign CEO but we have developed a strong leadership team here in Korea for many years and the success is there now,” the executive said.

“I think localization is the key. It is not for everything but it is a key. This is our strength. Be global but very local.’’

In line with that localization strategy, Otis runs one of its engineering centers here.

“We export the design capability of Korean engineers. One of our worldwide research centers is here but they work for the worldwide engineering center of Otis.”

Despite its sustainable growth, Blethon said that the firm is facing some challenges, such as supply chain- and turnover-related issues.

“Sometimes the supply chain can be a challenging factor for us. I would say sometimes turnover could be another distraction. We rely on local people we want to grow inside. Another challenge that we specifically face here in Korea is how to balance, particularly, the cost of labor increases by providing more efficient services to customers,” he said.

When asked about plans to hire more women employees amid a growing influence of women in local industries, Blethon said the company has recognized the importance of women workers and stressed he will try hard to hire more.

“The portion of female employees is about single digit. This is traditional in this industry. We recognized this issue and we are making efforts to change that. We want to have female leaders in key positions in each level of the company. It brings a lot to our organization.”