Challenge to Japan's Stronghold
The Korean carbon fiber industry is going to mount a serious challenge to the Japanese industry. Carbon fibers, which are very expensive cutting-edge materials, are expected to be used in various fields of high-tech industry such as aerospace and healthcare. Japanese companies are still dominating the global market, though.
According to industry sources on Aug. 23, GS Caltex completed the construction of a factory to produce carbon fibers on a trial basis in Jeonju, North Jeolla Province, preparing to operate the plant. If carbon fibers are confirmed to be commercially viable after about 2 years of pilot production starting in Sept., the company plans to start mass-producing as much as 500 tons of the material per year. The Korean oil refiner is nurturing carbon fibers as a future growth engine, along with biobutanol.
GS Caltex's plants in North Chungcheong Province and South Gyeong Province, Korea and in Suzhou, China are producing 12,000 tons of Long Fiber Reinforced Thermoplastic (LFRT) a year. The construction of a pilot production facility will serve as an opportunity for the company to focus on increasing its competitive advantage in the carbon fiber area.
The construction is significant in that the oil refiner's existing LFRT is polyacrylonitrile (PAN)-based, while the carbon fiber that will be produced in the facility in Jeonju is pitch-based.
PAN-based carbon fibers account for the vast majority of the carbon fiber market. Since they are light and strong, they are widely used in aerospace and sports goods. Pitch-based ones, on the other hand, are made from petroleum residues, by-products of the refining process. It means that GS Caltex, which specializes in oil refining, will be able to vertically integrate its carbon fiber business. The cost of production of pitch-based carbon fibers is relatively low as well. They are used in air purifiers, filters for water purifiers, high-temperature insulation materials, and fuel cells.
The Hyosung Corporation is also exploring new growth engines in the carbon fiber market. The company is planning to invest 1.2 trillion won (US$1 billion) in its plant in Jeonju by 2020 in an effort to produce up to 10,400 tons of carbon fiber. The firm is also going to finish the construction of a business incubator that is specialized in carbon fiber by the end of this year by providing space in its facility in Jeonju free of charge in order to make the place a home to related start-ups.
Nevertheless, the local carbon fiber industry is too weak to challenge the Japanese counterpart like Toray Industries or Teijin, which comprise more than half of the global carbon fiber market. In fact, Japanese companies virtually dominate the field of high-performance carbon fiber, which is used in the aerospace industry.