- Lays foundation to expand market share, profit in Chinese market banking on strongest competitiveness in industry
Hyosung signed the main contract on January 11th to take over a spandex plant in Zhuhai, Shandong Province, China from Tongkook Corporation. After being selected as a preferred negotiating partner in October last year, the Company exchanged an MOU with Tongkook Corporation, and has been conducting due diligence.
The Zhuhai spandex plant, which Tongkook Corporation constructed in August 2004 by investing 38 million dollars, has the capacity to produce 6,000 tons per year. The world's spandex market was struggling amid falling prices stemming from excessive supplies, but the market is seeing signs of a rebound as supply has dropped since 2005 with companies in Korea and abroad stopping production one after another. In particular, as demand for the product has expanded drastically by more than 10 percent primarily in China this year, supply has begun running short.
The newly acquired Zhuhai plant is producing mostly 40-denier products, which are in short supply, and 70-denier products which are premium quality, while the existing plant will focus on the production of high performance, high value-added products (fine denier products), to boost synergistic effects. The Zhuhai plant is expected to help Hyosung resolve shortages in self-supply of products primarily in China, and increase export volume to other countries including Europe, thus significantly contributing to the expansion of markets and profitability going forward.
