KCC to Halt Glass Fiber Plant Operations Amid Low-Priced Chinese Competition

KCC, the only domestic company in South Korea that has produced glass fiber, will halt operations at its glass fiber plant.

원본보기 아이콘

According to industry sources on April 14, KCC is expected to hold a board meeting next week to decide on suspending operations at its Sejong glass fiber plant. The plant is anticipated to operate until the end of this month.

Glass fiber refers to a material made by melting glass at high temperatures and drawing it out into fine threads measured in micrometers (one-millionth of a meter). It is applied to various materials to enhance their physical strength.

KCC entered the glass fiber business in 1998, investing approximately 110 billion won, and in 2019 injected an additional 120 billion won to expand the plant. However, the company could not withstand the influx of low-priced Chinese products. Chinese imports were more than 30% cheaper than domestic products, making losses inevitable.

KCC had maintained its prices on par with Chinese products to retain market share, but with cumulative losses exceeding 100 billion won over the past three years, the company determined that normal operations were no longer feasible. Employees working at the plant will be reassigned to other business divisions after discussions with the company.

Chinese companies have dominated the glass fiber market by leveraging large-scale facilities with an annual capacity of 3 million tons, securing local raw materials, and utilizing Russian LNG.

A KCC official said, "The price difference between domestic and Chinese products is about 35-40%, and with losses deepening over the past three years, we decided to halt operations."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.