Returns for Restructuring
Hyosung, whose operating profit exceeded one trillion won (US$900 million) for the first time last year, is faring well this year, too. Experts point out that this is because the company restructured itself in earnest for the past 20 years while continuing to increase its overseas investment and supply the world’s best products.
In the first quarter of this year, Hyosung’s sales and operating profit reached 2.8711 trillion won (US$2.58 billion) and 232.3 billion won (US$209 billion), new quarterly highs, respectively. The company is highly likely to exceed one trillion won in operating profit for the second consecutive year in that the first quarter has been an off season in the chemical and textile industries. Its operating profit totaled 223 billion won in 2012 and almost doubled each year until last year.
Paradoxically, the ongoing prosperity of Hyosung is rooted in the Asian financial crisis in 1998. At that time, the company sold its main subsidiaries such as Hyosung BASF, Korea Engineering Plastics and Hyosung ABB over a period of three years while merging nylon fiber and tire cord industry leader Hyosung T&C, leading polyester manufacturer Hyosung Living Industry, Hyosung Heavy Industries and Hyosung Corporation to tide over the crisis.
At present, four Hyosung products – spandex, tire cord, seat belt yarn and airbag yarn – have the highest market shares in the world. In fact, the company ranked third in the South Korean spandex fiber market back in the early 1990s. However, it rose to the top in 2011 by means of continuous investment and R&D.
It developed South Korea’s first polyester tire cords in 1978. Now, the company is the world’s largest tire reinforcement material manufacturer whose products range from lyocell, aramid and nylon tire cords to steel cords and bead wires. Since 2000, the company has signed a number of long-term contracts with leading tire manufacturers such as Goodyear and Michelin while acquiring manufacturing facilities around the world in an active way.
Hyosung’s solid growth can also be attributed to its well-balanced business portfolio covering fibers, industrial materials, chemical products, heavy industries, construction, finance and international trade. Last year, every one of the seven major business units was in the black. Specifically, the profits of the respective units were 313 billion won (US$281 million), 218.4 billion won (US$196 billion), 148.2 billion won (US$133 million), 185.3 billion won (US$166 million), 81.7 billion won (US$73 million), 72.7 billion won (US$65 million) and 8.9 billion won (US$8.0 million), respectively.