The domestic textile industry has rapidly begun to lose its global competitive advantages in mid-2000s. At that time, labor costs of China were about a tenth of that of Korea. Korean textile firms, which had enjoyed significant price competitiveness for years, have faced difficulties and challenges, primarily attributable to surges in raw material prices and oversupply of finished products.
Hyosung has sought to develop high-quality products, while working to level up its technological competitive power. Hyosung has expanded investments based on its technical expertise, while other Korean textile companies have suspended or terminated their spandex business operations. Hyosung, with its Gumi Plant designated as a global production network foothold, has consistently expanded its spandex production capacity.
Hyosung, ranked third in the domestic spandex market in early 1990s, became the No. 1 global market leader in 2011, backed its advanced technology and aggressive investment. The company also took first place globally in terms of production capacity. This noteworthy performance is recognized as a prominent example in which the textile industry, once regarded as a dying business, transformed to a high-earning industrial sector. Currently, Hyosung’s spandex business, as a cash cow, makes significant contributions to its earnings growth.
Today Hyosung maintains the global No. 1 market position amid challenges from Chinese and other foreign competitors, supported by its technological supremacy and customer-oriented management strategy. In 1990, the company kicked off a Spandex Development Project with the aim of developing spandex, which is referred to as the textile’s semiconductor, on its own technology. The then Chairman Cho Suck-rai lavishly invested in R&D after developing spandex. At the same time, he moved to take measures to fully satisfy the requirements of customers. As a result, Hyosung has the capacity to develop value-added spandex products, supported by its 20 years of constant technological innovation.
Hyosung’s Spandex Performance Unit has made every effort to improve its technology and business activity to produce the world’s best spandex brand, backed by its constant R&D activities, expansive global network, and innovative marketing. Since its adoption in 1992, the spandex brand “Creora” has signified the commitment to excellence in quality, service, and value.
In addition, the Spandex Performance Unit has established manufacturing facilities in China, Turkey, Vietnam, and Brazil, as well as Korea to develop products of excellent quality and better service the needs of customers in global markets. Hyosung’s world best spandex brand Creora will continue to strive to satisfy customers’ satisfaction by delivering the best products, service, and value to its global customers.
After stabilizing its plant production activity including Anyang and Gumi Plants in Korea, Hyosung has embarked on a global network establishment. In 2001, Hyosung established its first spandex plant in Jiaxing in China and acquired a China’s production facility from Dongkuk Trading. The company also established a production plant in Guangdong, also in China. Currently, China is Hyosung’s global No.1 market. In addition to China, Hyosung has established manufacturing facilities in Vietnam, Turnkey, and Brazil. Of note, the company has heavily invested in Vietnam in early 2000s, with the belief that the Southeast Asian country could offer a favorable business environment in terms of production infrastructure and labor costs.
In 2008, the company established a spandex plant in Turkey in order to cope with rising demand in Europe, the Middle East and North Africa. The production output in Turkey has enabled Hyosung to become a global No. 1 market leader by satisfying the varied needs of European customers. The company also set up a plant in Brazil with a population of 200 million, which will serve as a foothold to the South American market, in 20l1. Two years later, the company boasted a market share of 50% in Brazil, while expanding its market shares in Latin America.
Hyosung holds a 45% market share in global tire cords, a major component of car tires
Hyosung holds the world’s largest market share of 45% in the tire cords market. In 1968, Hyosung
became the first Korean firm to produce nylon tire cords. In 1978, this was followed by production of polyester tire cords with itsr own technology. Currently, Hyosung rolls out a diversity of textile tire cords such as nylon, polyester, aramid and lyocells. Hyosung is the only integrated firm in the tire reinforcement field, which produces polyester tire cords including steel and beads
Tire cords are a textile component which is used to increase the durability, speed and safety of tires. Currently,
one of every two cars on the road globally uses Korea-made tire cords. Hyosung accounts for 45% of the polyester
tire cords which are mainly used for passenger car tires. Hyosung Vice President Cho Hyun-sang said, “We have maintained the No. 1 global ranking for more than 15 years, backed by our top quality, sufficient production capacity and reasonable prices.”
In 2006, Hyosung signed a remarkable long-term supply contract with Goodyear, a large-scale contract involving about USD3.2 billon. The company also signed a contract to acquire a tire cord plant based in Virginia, the U.S. These moves helped Hyosung to establish a production facility in the world’s largest auto market. In 2006, Hyosung also signed contracts to take over four Goodyear tire core plants in the U.S., Europe and South America, which helped Hyosung to secure a foothold in South America, a growing market, in addition to the premium market of Europe, China and the U.S. As a consequence, Hyosung has consolidated its No. 1 position in the global tire cords market.
Of note, the plant in Vietnam rolls out 100,000 tons of tire cords annually, the world’s largest, of which over 90% are exported to many countries around the globe. The facility is the only integrated Hyosung plant to produce tire cords, steel cords and bead wires. The Vietnamese plant whose annual exports exceed 1 trillion won, accounts for over 1% of Vietnamese total annual exports.
