Korean sandwich panel companies in crisis

The sandwich panel structure, which is vulnerable to collapse during a fire, is believed to have fueled the flames. (Source: Yonhap)

Small and medium-sized expanded polystyrene sandwich (EPS) panel manufacturers in South Korea are facing a crisis. Thanks to a setback with implementing revised building regulations aimed at improving fire safety, their product standard models developed at the cooperative level are being suspended or canceled one after another.

According to industry sources on Monday, the country’s Ministry of Land, Infrastructure, and Transport recently imposed a suspension on a standard model developed by the Korea Foamed Plastic Industry Cooperative and certified by the Korea Institute of Civil Engineering and Building Technology.

The ministry took similar actions against standard models certified by three organizations, including the Korea Polyurethane Industry Association and the Korea Metal Panel Industry Cooperative in November 2023, due to issues with the certified standard models identified during monitoring.

While the latest suspension is a temporary measure, it left only the glass wool panel from the Korea Fire-rating Building Material Association unaffected out of the four commonly used standard models in the industry. Although the temporary suspension on two other standard models was lifted on February 29th, 2024, no corrective measures were taken, and the models are ‘on hold’.

Sandwich panels are construction materials that contain insulation materials such as Styrofoam or urethane foam between steel plates or boards. The internal insulation materials used are EPS, also known as Styrofoam, polyurethane, and glass wool. EPS, which is the most affordable among them, accounts for 60 percent of the sandwich panel market, and the Korean market is worth about 1.8 trillion won ($1.37 billion).

Sandwich panel manufacturers must possess test certificates or quality approval documents for each panel type to be used as a construction material. But obtaining separate certificates for each panel type increases costs and, consequently, prices. To compensate for this problem, the government introduced the composite material standard model certification system as a temporary measure to alleviate various issues that may arise during the early stages of introducing quality approval for construction materials and the difficulty manufacturers face in obtaining quality approval for each product.

The problem lies in the fact that the standard model system, created for the convenience of businesses, has not fulfilled its intended role. A loophole was created that allowed manufacturers to produce and sell sandwich panels without undergoing performance testing and quality management capability verification by the Korea Institute of Civil Engineering and Building Technology. This led to some companies using association standard models but producing products that did not meet the fire-resistant performance standards. In a recent government test of sandwich panel products from companies affiliated with an association with the certified standard model, 90 percent of them were deemed unsuitable.

There are calls for more stringent regulations and inspections, but the land ministry is in a complex position. If the 300 small and medium-sized enterprises in the sandwich panel industry go bankrupt, it would result in 10,000 workers losing their jobs.

“With a severe shortage of certification agencies, it takes at least over a year to obtain certification. This is tantamount to telling small businesses to shut down,” a senior official at the Korea Foamed Plastic Industry Cooperative, which represents around 70 small businesses that produce sandwich panels, said.