Hyosung Returns to the '1 Trillion Club'

Hyosung Headquarters Building Exterior View

Operating Profit Surpasses 1 Trillion KRW for the First Time in 3 Years Since 2016

[Asia Economy Reporter Park So-yeon] The operating profits of the five key companies including Hyosung Corporation, Hyosung TNC Co., Ltd., Hyosung Heavy Industries Co., Ltd., Hyosung Advanced Materials Co., Ltd., and Hyosung Chemical Co., Ltd. have exceeded 1 trillion KRW again after three years.

On the 6th, Hyosung announced that the total sales of the five key companies reached 18.0119 trillion KRW, and the total operating profit was 1.0102 trillion KRW. This marks the first time in three years since 2016, when sales were 11.9291 trillion KRW and operating profit was 1.0163 trillion KRW, achieving an operating profit of 1 trillion KRW for the first time in history. This achievement came amid sluggish performance in the same industry.

The positive factors behind this performance include ▲ increased sales of premium textile products reflecting customer needs in markets such as China, where competition has intensified and supply exceeds demand ▲ strong performance of major overseas subsidiaries in Vietnam, China, and India ▲ increased overseas exports by subsidiaries such as Hyosung TNS ▲ and improved profitability in future new businesses such as carbon fiber and aramid.

Hyosung’s recent years of improved performance are evaluated as a clear sign that Chairman Cho Hyun-joon’s global management, now in its third year, has firmly taken root.

This is interpreted as the practical results of the ‘VOC (Voice Of Customer) management’ that Chairman Cho has always emphasized with the phrase, “The answer lies with the customer.”

Five Key Companies Achieve Stable Performance with Results in Global Markets

Hyosung Corporation posted sales of 3.3813 trillion KRW and operating profit of 244.7 billion KRW, up 12.6% and 57.9% respectively from the previous year (sales of 3.0025 trillion KRW, operating profit of 155 billion KRW), thanks to strong performance by its subsidiaries. In particular, Hyosung TNS, a financial IT subsidiary, achieved record-high sales of 943.3 billion KRW and operating profit of 97.2 billion KRW last year, driven by increased overseas sales in the U.S., Russia, and other countries.

Hyosung TNC, the global No.1 in spandex, recorded sales of 5.9831 trillion KRW and operating profit of 322.9 billion KRW last year. This was due to increased spandex sales centered on overseas production subsidiaries in China, Vietnam, and the India plant, which began full operation in September last year, despite the global economic downturn. Additionally, the normalization of operations at the NF3 plant in Quzhou, China, contributed to profitability, with overseas subsidiaries delivering strong results.

Hyosung Advanced Materials maintained sales of its globally leading tire cord products despite the Chinese economic slowdown caused by the U.S.-China trade war and the resulting contraction in the automotive market. Especially, sales of future businesses such as aramid and carbon fiber began in earnest, resulting in stable performance. The provisional results recorded sales of 3.0536 trillion KRW and operating profit of 158.3 billion KRW.

Hyosung Chemical also achieved sales of 1.8125 trillion KRW and operating profit of 153.9 billion KRW. This improvement was due to enhanced profitability in the polypropylene (PP) sector through brand value enhancement and a more than 50% increase in sales of the new business polyketone compared to the previous year (2018).

However, Hyosung Heavy Industries experienced some sluggishness in the power sector due to anti-dumping tariffs imposed amid the U.S.’s strengthened protectionism. Nevertheless, the construction sector secured stable orders in residential, maintenance, and civil engineering projects, achieving sales of 3.7814 trillion KRW and operating profit of 130.3 billion KRW.

Third Anniversary of Appointment: Chairman Cho Hyun-joon’s Global Management Achievements

Since his appointment, Chairman Cho has frequently visited global business sites to listen to voices from production sites and expanded his on-site management by personally attending global textile exhibitions in France, China, and other locations to meet customers directly.

Alongside this, he has focused on expanding the global network by meeting top leaders of key countries such as Indian Prime Minister Narendra Modi, Vietnamese Prime Minister Nguyen Xuan Phuc, and Mexican President Andres Manuel Lopez Obrador to discuss business cooperation.

Based on his expert knowledge of the IT business and global management sense, Chairman Cho has also directly led the expansion of overseas sales for Hyosung TNS, a specialized ATM manufacturing company. As a result, Hyosung TNS supplied major large banks in over 30 countries worldwide, including the U.S. and Russia, achieving record-high performance last year.

Since the late 1990s, Chairman Cho has laid the foundation for a global production network for key businesses by leading the C (China) project in the spandex sector to target the Chinese domestic textile market. Ultimately, these overseas production subsidiaries have become an important foundation driving Hyosung’s performance in recent years.

Profitability of Future New Material Businesses Improves, Full-Scale Performance Expected

Hyosung has actively fostered future new businesses in the materials sector. As a result, last year, profitability in new business sectors such as carbon fiber, aramid, NF3, and polyketone improved significantly, serving as a stepping stone for performance enhancement.

Hyosung Advanced Materials plans to invest a total of 1 trillion KRW in the carbon fiber industry, known as the ‘dream new material,’ expanding production capacity to 24,000 tons per year (10 lines) by 2028. Currently, it operates a production plant with an annual capacity of 2,000 tons and is about to complete the expansion of one additional line with an annual capacity of 2,000 tons by February.

After successfully developing carbon fiber for the first time in Korea in 2011, Hyosung began full-scale production and sales at its Jeonju plant from 2013. It has continuously expanded its customer base through ongoing technological development and actively worked to reduce manufacturing costs. In particular, it is proactively responding to market expansion by capturing opportunities such as hydrogen vehicle fuel storage tanks and promptly investing in capacity expansion.

Profitability of aramid has also greatly improved. Aramid is five times stronger than steel and possesses heat resistance and chemical resistance, making it used in various industries such as high-performance tires, hoses, bulletproof vests, and bulletproof helmets.

Last year, demand for aramid surged as it was used in optical cables for 5G communication networks, and global demand for bulletproof materials and industrial tires also increased, expanding prices and improving profitability. Hyosung Advanced Materials currently operates a plant in Ulsan with an annual capacity of 1,250 tons and plans to secure a production capacity of 5,000 tons by 2021.

The new business NF3 also saw significant profit improvement, establishing a stable profit trend. NF3 is a gas used to clean equipment contaminated with foreign substances during the manufacturing processes of semiconductors, LCDs, and solar cells, which are components of various electronic devices. Hyosung operates production plants in Yongyeon and Quzhou, Zhejiang Province, China. Last year, the normalization of operations at the Quzhou plant played a key role in driving profit improvement.

The polyketone business also helped improve Hyosung Chemical’s profitability as sales volume increased by more than 50% compared to the previous year. Polyketone, an eco-friendly engineering plastic material, was first commercially produced worldwide by Hyosung in 2013 and is produced at the Yongyeon plant in Ulsan.

Polyketone can be used mainly for engineering plastic applications and ultra-high-strength superfiber applications. Hyosung is increasing its supply to toys, cosmetic components, and other products. Hyosung Chemical aims to secure stable profits this year by more than doubling sales volume.

This content was produced with the assistance of AI translation services.