Kolon has made aggressive moves to increase its production bases for air bags in China, Mexico, and Vietnam. The company aims at achieving its goal of 600 billion won (US$546 million) of sales in the airbag division in the upcoming 2020 by targeting multiple parts of the global market spontaneously.
Kolon Industries said on September 5 that it has currently acquired the air bag sewing division plant of Hanyoung International in Ho Chi Minh, Vietnam. The price tag is approximately 17 billion won (US$15.23 million), and the factory produces seven million air bag cushions a year. Kolon plans to utilize the factory as an operating base for targeting auto markets across Southeast Asia.
Along with that, the South Korea’s leading textile maker said that it would run in earnest its air bag factory located in Coahuila, Mexico. It will supply the auto parts to major global finished auto makers that flock into areas of North America with the capacity of some 3 million units a year in the Mexico factory. With the factories combined, Kolon has operated four overseas production bases for air bags in total.
The textile company plans to expand the existing air bag production base in China. Kolon Industries has decided to invest in its first Chinese factory in Nanjing for facilities of highly functional side curtain air bag. The Nanjing plant will produce additional 600,000 air bags a year beginning early next year when the investment is completed. Kolon is reviewing an addition construction of its second air bag factory in Jurong, China, which is operating at 100% capacity. And it is also considering a plan to build its third air bag base in the northeast area of China.
“We are looking for investment areas to tackle auto markets in Europe within two to three years, said an official at Kolon Industries, stressing, “We will increase our yearly sales amount of the air bag business to 600 billion won (US$542.8 million) by 2020.” The global market size for air bags is estimated to be some 380 million units as of last year. Kolon forecasts that the market will grow at a rate of 10% a year as safety regulations for vehicles are getting tighter as well as the demand for vehicles is on the rise. Its share reportedly accounts for 10% of the world air bag market.