Chairman Cho Suk-rae of Hyosung Group.

Hyosung Co. joined the 1-trillion-won club last year with its operating profit rising to 1.009 trillion won thanks to constant sales of its Creora, a spandex brand textile tire code that is used to make car tires stronger. The milestone came despite the sluggish state of the economy.

Industry sources said Chairman Cho’s management strategy to focus on technology paid off handsomely, with the Creora helping the company cope with the slowdown in the global economy. Textile business sources said it was the first time that the company’s operating profit exceeded 1 trillion won in its 49-year old history, which came to around 8 percent in the profit ratio over its total sales last year. Toray of Japan, a leading textile maker in the world, estimates its profit ratio stood at 6.6 percent last year, lower than that for Hyosung. Toray’s sales revenue up to the third quarter in 2015 amounted to 754.6 billion won, averaging 250 billion won in quarterly sales, industry sources said.

Hyosung’s excellent performance last year was a result of the superb rebound in sales of its Creora and a resurgence of its heavy industrial sector from it’s a slowdown which began in 2011. The company also earns hefty royalties from foreign companies that use the Creora tire code, which amount to around 100 billion won from 34 foreign companies.

Hyosung Corp. won contracts worth $30 million to supply static synchronous compensator (STATCOM) smart grids to India and Panama, the company said recently.

STATCOM is a device that ensures the stable supply of power by minimizing power loss during transmission. Hyosung is the only company that commercializes the advanced technology in Korea.

The company has incorporated a modular multi-level converter (MMC), a state-of-the-art solution, to boost power output of conventional STATCOM by more than 10 times.

Panama’s state transmission company Electrica S.A. (Company Empresa de Transmission Electrica S.A.) and India’s state-owned electric utility company PGCIL Ltd. (Power Grid Corporation India Ltd.), inked deals with Hyosung for the high-tech energy solution.

Hyosung Corp. has witnessed a major turnaround in the last 20 years. 

The company was almost broke in 1997, but Chairman Cho, who holds a Ph.D from Illinois University and a graduate of Waseda University in Japan, insisted that the company can survive by focusing on the development of the technologies for Creora. Consequently, the company was able to cope with the financial crisis and turned around its operation.

Hyosung is now counting on the production of Polyketone, an new environmentally-friendly material. A new 125-billion-won plant in Ulsan to produce the new material is online. It is capable of producing 50,000 tons of Polyketone. The company plans to invest an additional 1 trillion won to boost the plant’s annual capacity to 300,000 tons from 2021, and an R&D center.

The industrial conglomerate and the local government of Ulsan signed a memorandum of understanding last year to jointly work on the development, which is scheduled to be completed in 2021. The 208,000-square-meter site is set in Yongyeon-dong, which is close to another Hyosung plant.

Polyketone is an eco-friendly material developed by Hyosung for the first time in the world. The engineered plastic is known to be more sustainable by using carbon monoxide as its main monomer. 

With the new manufacturing site enhancing the production capability, Hyosung expects to dominate more than 30 percent of the 66 trillion won global engineering plastic market share in the future.

An ad for the Creora, a textile tire code, and also used in other textile products, produced by Hyosung.(Photos:Hyosung)