Kolon Industries Expands Tire Cord Factory in Vietnam

[Asia Economy Reporter Park So-yeon] Kolon Industries is expanding its tire cord production plant in Vietnam to accelerate its global tire cord market penetration.

Kolon Industries announced on the 12th that it has decided to expand its polyester (PET) tire cord plant in Binh Duong Province, Vietnam. The expansion aims for an annual production capacity of 19,200 tons, with completion targeted for September next year.

This is the second investment following the establishment of a PET tire cord plant with an annual capacity of 16,800 tons in 2018. With this expansion, the production capacity of the Vietnam plant will increase to 36,000 tons. The total production volume will be 103,200 tons.

Kolon Industries' Vietnam tire cord plant, located in the Bau Bang Industrial Complex in Binh Duong Province, has introduced the latest production facilities across all processes, establishing an integrated production system from yarn production to weaving, heat treatment, and finished products.

It has also completed quality stabilization approvals from global tire companies and is currently operating at full capacity. The new plant to be built will also have an integrated production system, expected to significantly contribute not only to increased production volume but also to improved efficiency.

The decision to expand is based on the continued growth outlook of the tire market. According to an automotive market research firm, the tire market is expected to recover to pre-COVID-19 levels from 2022 and then grow at an average annual rate of about 3.5%.

In particular, with the expansion of eco-friendly vehicle adoption, the demand for tire cords is also expected to increase, sustaining growth in the mid to long term. Hybrid cars, electric vehicles, and hydrogen vehicles use 10-20% more tire cords than internal combustion engine vehicles due to increased curb weight caused by batteries, which strengthens tire durability.

Since starting its tire cord business in 1973, Kolon Industries has built business competitiveness through partnerships with global major tire companies such as Michelin, Goodyear, and Bridgestone. After establishing a plant in Nanjing (南京), China, in 2004 as a foothold for the Chinese market, it has strengthened its global business structure by securing production bases with top technology and price competitiveness through first and second investments in Vietnam.

Park Kyu-dae, head of the automotive materials division, said, "With this second investment, we plan to realize economies of scale and expand market dominance through price competitiveness. At the same time, we will maximize profits in the tire cord business by expanding sales of high-quality aramid and hybrid tire cords, which were developed domestically for the first time."

Tire cords are fiber reinforcements that serve as the skeleton inside tires in the form of high-strength fiber fabrics, playing a crucial role in vehicle safety and performance. Depending on the raw material, tire cords are classified into PET, Nylon, Rayon, and Steel tire cords. Kolon Industries produces PET tire cords mainly used in passenger car tires.

Tire cords are products directly linked to the safety of end users, making market entry barriers higher compared to other industries. It is a capital-intensive industry requiring large-scale investment and has some labor-intensive characteristics, making technology development and production very challenging. However, once quality is recognized in the market, it has the advantage of maintaining a stable business continuously.

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