Hydro-Tech teams up with South Korean company to expand international presence

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A Sault Ste. Marie company is making inroads into the international bearing market.

Hydro Tech Inc., has partnered with Movena Korea Co., a South Korea-based maritime engineering and consulting company and is embarking upon a three-year joint project.

Company president and CEO Mike Dupuis said he’s been examining ways to expand the company, which he began in 2001, in other markets and, in his exploratory research, he began discussions with Movena.

Hydro Tech specializes in designing bearings and repairs and refurbishes turbines and generators.

“Many of our clients view Hydro Tech as a premium bearing designer and we are often single sourced, especially when they have a complicated bearing,” Dupuis told The Sault Star.

About one-third of the company’s current business involves taking an existing bearing and repairing it or replacing it within the confines of the existing equipment.

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“Sometimes our new bearings hold more than 100 per cent of additional load,” he said.

The remainder of the business centres around repairing and renewing turbines and generators, he said.

“We’ve been looking at growth opportunities over the past few years with new manufacturers and capturing some of the international market,” he said. “We’ve sold our bearings across North America.”

The competition comes from manufacturers such as China, India and across Europe, where manufacturing is sometimes less expensive.

“Our designs are more expensive but just as good or better. What we want to do is look at increasing our research and development to manufacturer the most cost-effective bearing without making the product a lesser quality or less effective,” he said.

Hydro Tech received a grant to search for a partner in Korea.

Enter Movena.

The Korean company has its foot in the marine marketplace and has developed its expertise in the end-client marketplace.

“With their client base, and their engineering with shaft designs and our bearings, we figured we could make a new team with new clients, especially in the shipping industry and bring Moverna in the power generation market,” Dupuis said. “They’re going to expose us to the shipping industry and we’re going to expose them to the power generation market.”

To date, Hydro Tech has very little experience in the shipping industry, but this is an opportunity to delve into a new area of the industry.

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Dupuis said Hydro Tech is already making bearings similar to the turbine bearings required in the shipping industry.

Hydro Tech and Movena have already wrapped a complete business plan and have divvied up the responsibilities required around the design and alignment of auxiliary systems, client servicing and other areas.

Ultimately, Hydro Tech is responsible for the bearing design and manufacturing while Movena will focus on auxiliary systems that support the bearing design.

The target market is shipbuilders and small generation companies that require bearings up to a metre in diametre in the hydro generation market.

The project’s focus is to develop water bearings for the shipping industry. The bearings will be the last before the shaft enters the water and efforts are concentrating on eliminating the use of oil, which is harmful to the water, and replace it with a natural material that is environmentally friendly.

The product, Lignum Vitae, is not used by Hydro Tech’s competitors, Dupuis said.

“Lignum Vitae is a natural material that runs in water and is environmentally friendly. Our competitors use other products and oils that can harm the water,” he said.

Dupuis said he is confident the partnership will nudge Hydro Tech into the international marketplace with its ability to solve unique issues that its competitors have not solved in the past, but Hydro Tech has.

“We feel that we might not be able to capture all of the market, obviously, but there is definitely a percentage of the market that is available to us with minimal effort,” he said.

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“We’re hoping this partnership will open up other avenues for us around the world,” Dupuis said. “We can certainly work together to tackle other markets together and we are hoping for a continued, long partnership to continue our growth.”

Hydro Tech has completed projects elsewhere around the globe. In 2009 it was able to solve a long-standing bearing issue in Ghana, Africa, one of the company’s first projects outside of North America. It has also completed bearing work in Chili and Brazil.

The project comes with the help of $500,000 of research and development funding support through the Canadian International Innovation Program. The funding is offered by Global Affairs Canada in collaboration with the National Research Council of Canada Industrial Research Assistance Program.

The program sponsors small- and medium-sized enterprises and international partners. It will cover a majority of wages for the new employees the company needs to hire and Hydro Tech will also direct more than that amount into the project. It has already hired one full-time employee and expects to hire another two technical experts. As the research and development progress, Dupuis anticipates a few more additions to its staff along the way to deploy on site to oversee installation projects.

Hydro Tech’s headquarters is in Sault Ste. Marie but also operates offices in Niagara Falls, Ont., and Portland, Me., and employs about 20 full-time employees.

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Movena Korea is also receiving about $600,000 Cdn. funding from the Korea Institute for Advancement of Technology.

With Sault Ste. Marie’s recent designation as a Foreign Trade Zone, Hydro Tech is hoping that will also support the research and development project.

“We’re just starting to investigate that now. We don’t really know how that will affect us right now,” he said.

If this project is successful, as Dupuis said he believes it will be, Hydro Tech could double its business and will hire many more employees for its Sault Ste. Marie office.

Hydro Tech is also exploring other project options with its turbine and generator businesses.

“We really anticipate that part of the business will grow also,” he said.