Hyundai Heavy Industries announced Monday that it will establish Hyundai Electricsystems in Vladivostok, Russia, that will produce gas insulated switchgears.

Gas insulated switchgears are equipment used to control electricity flow, and to cut off power if a fault occurs in a power supply system.

The company said it will invest 40 billion won ($38 million) in building the plant, and that the facility is scheduled for completion in August 2012.

Once complete, Hyundai Electricsystems will be able to produce 250 gas insulated switchgears capable of operating on lines carrying between 110 kilovolts and 500 kilovolts on an annual basis, the company said.

Hyundai Heavy also said that it plans to expand the facility to raise its annual production capacity to 350 switchgears.

The company said the decision to set up the facility was made in light of the high growth projection for the Russian market, which is expected to increase about 10 percent each year to reach 750 billion won in 2017.

The company added that it already signed a mid-term supply contract with Russia’s state-run grid operator FSK, the plant will allow it to double sales of switchgears in Russia in 2013.

The company set the switchgear sales target for 2013 at 100 billion won. Last year Hyundai Heavy took in 52 billion won from switchgears in Russia.

By Choi He-suk  (cheesuk@heraldcorp.com)