Hyosung Vietnam, the local subsidiary of Hyosung Group, has emerged as the core driver of growth of the Group since the late 2000s. Its annual sales revenue sharply increased from KRW6 billion (approx. US$5.24 million) in 2008 to over KRW1 trillion (approx. US$87.4 million) in 2014, generating substantial surplus. Chairman Cho Hyeon-jun of Hyosung Group aims to foster Hyosung Vietnam as beach head for expanding into global market. Foreseeing that Vietnam will emerge as the most ideal market for globalization following China, Chairman Cho Hyeon-jun has been expanding its operation as pivotal production base of mainstream products, such as spandex and tire cord.
Since the mid-2000s, Hyosung has been concentrating resources on enhancing efficiency in production by installing integrated production system of spandexes and tire cords in Vietnam. After establishing its subsidiary in Vietnam in May 2007, the company has been producing spandexes, tire cords and steel cords. In April 2015, it set up another subsidiary, Hyosung Dongnai, to expand production facilities of spandexes and tire cords, while adding manufacturing facilities of electric motors, nylon and PTMG. Having completed construction of production facilities of PTMG, the source material for high value-added spandex ‘Creora’, this subsidiary began its production last year, thus setting up integrated development and production system of premium spandexes. With these facilities, the company expects to enhance price competitiveness of nylon and spandexes, while strengthening marketing activities and developing new markets.
By establishing a system of manufacturing three major tire reinforcement materials, such as tire cord, steel cord and bead wire, at a single plant, the company now can sharpen competitive edge in their global market. And it will actively push into electric motor market in Vietnam, expecting to bring a momentum for expanding into the heavy industry. Low-voltage motor market in the country now reaches around KRW 50 billion (approx. US$43.7 million) and it is expected to continue to grow. In this growing market, Hyosung looks forward to taking advantageous position in supplying high-efficient and premium electric motors.
Going forward, Hyosung Vietnam will gear up to expand presence in the global markets of spandex, tire cord and steel cord by continuously expanding their production capacities. At the same time, the company filed an application for licensing construction of wharf for transporting liquefied petroleum gas (LPG). It believes that it will be able to enter the fuel market of Vietnam in connection with propane dehydration (PDH) business. Also, the company intends to make inroad into electric power-related market, such as ultra high-voltage transformer and distribution transformer.
Under these strategies, Hyosung Group is actively moving to expand its relations with Vietnam and local business. In November last year, Chairman Cho Hyeon-jun of Hyosung Group had a meeting with Prime Minister Nguyen Xuan Phuc of Vietnam to discuss ways of expanding collaboration with the Vietnamese government in infrastructure and new investment projects. At the meeting, “Hyosung is committed to taking part in various infrastructure projects, such as power plants, apartment complexes, waste processing facilities and petrochemical plants. We will also expand new information technology (IT) businesses as well as financial industry, such as ATMs and electronic payment, to contribute to development of IT industry,” said Chairman Cho.
In addition, Hyosung concluded last year a memorandum of understanding (MOU) with the Vietnamese government for constructing a chemical plant in an industrial complex in Baria Vungtau State. The company will invest to build a polypropylene (PP) production plant, LPG storage facilities, and wharf for LPG and petrochemical products. Leveraging its integrated petrochemical production facilities in Vietnam, it aims to increase share in their markets in China and Southeast Asia as well as Vietnam.
Founded in 1966, Hyosung has grown as one of leading companies in Korea, contributing to economic growth and development of Korea by advancing textile and heavy industries, despite numerous crises. After having been concentrating resources on core businesses such as spandex and tire cords and making preemptive investment in Vietnam while developing many indigenous technologies, Hyosung achieved the record-high operating profit of over US$1 trillion last year. Particularly, the company invested over KRW1 trillion (approx. US$87.4 million) in the Nhontrach Industrial Complex in Vietnam since 2007. Thanks to potential of its domestic market and geopolitical position, Vietnam is emerging as a market since the mid-2000s that will lead the next generation Asian market, attracting attention as the post-China country. Hyosung Vietnam gained more than KRW1 trillion in annual sales after 2014, representing over 20% of the total operating profit of Hyosung Group in 2015. As Hyosung Vietnam is established its position as a global beachhead, it is expected to serve as the basis for sustainable growth of Hyosung Group.