Hyundai Heavy Industries, the world’s largest shipbuilder and a leading electro electric systems manufacturer, today announced an investment of KRW 40 billion (USD 37.7 million) to build a gas insulated switchgear plant in Vladivostok, Russia.

The 40,000 square meter plant, Hyundai Electrosystems, will break ground within the month and will be completed by August 2012. When completed, the plant will produce 250 units of GIS ranging from 110 kV to 500 kV a year. There are plans to expand its annual capacity to 350 GIS by 2015.

With the new plant, Hyundai Heavy, which recorded sales of KRW 52 billion (USD 49 million) last year in Russia, expects to achieve KRW 100 billion (USD 94 million) sales by 2013.

Gas insulated switchgear (GIS) is a major piece of electrical equipment used in a substation. It contains a gas circuit breaker, disconnecting switch, earthing switch, voltage transformer, current transformer, and lightening arrester in a grounded metallic enclosure. The switchgear is filled with SF6 gas, which has reliable insulation and arc-quenching capability.

Establishment of Hyundai Electrosystems has been drafted as a part of Hyundai Heavy’s long-term strategy to gain a foothold in the Russian GIS market. It is expected that the Russian GIS market will see annual growth of 10% from 2012, reaching a market value of more than USD 700 million by 2017 due to the Russian government’s electric power system modernization policy.

Previously, the Ulsan, South Korea-based company won an order from FGC UES (Federal Grid Company of United Energy System) to supply 50% of its GIS needs from 2013 to 2017.