Hyosung Group, which is now under the stewardship of Chairman Cho Hyun-joon, is expected to join the select club of companies posting more than 1 trillion won in operating profit this year for the second straight year.
The group chalked up 2.8711 trillion won in sales and 232.3 billion won in operating profit in the first quarter of 2017, it said on April 25. The figures represent a 2.1 percent rise and a 4.5 percent increase in terms of sales and operating profit over the same period of last year, respectively. The group saw net profit in the first three quarters of the year surge to a record 161.1 billion won, representing a 27 percent jump over the 1st quarter of 2016.
“We’ll devote ourselves to securing a global competitive edge so that Hyosung can win without wavering despite any market conditions, based on the group’s proprietary technology power,” Chairman Cho said.
The latest success was led by the textile business and the industrial materials business, showing significant signs of growth momentum of late, the business group said. Spandex, Hyosung’s mainstay item, is being boosted by rising prices, leading the growth trend. Tire cords, the group’s mainstay industrial material, saw profits increase thanks to technology support to customer companies and after-sales services.
The expansion of its polypropylene (PP) plants also played a leading role. The group has expanded plants to produce PPs in use for waste water pipes and medical syringes since 2015. The group has completed the expansion of the PP-3 plant on the site of the first Yongyeon Plant in Ulsan to 200,000 tons in the first quarter by investing some 150 billion own.
The latest expansion has enabled the group to raise its annual PP production to 500,000 tons, and the group’s construction of an LPQ and PP production plant in Vietnam with an investment of $1.2 billion will establish an integrated production system in the chemical business, raising the PP production, a group official said.
The business outlook for this year is rosy. Spandex is forecast to see its profits rise as summer, a high season for swimsuits and summer garments, falls in the second quarter. The heavy industry business for ultra-high voltage transformers and circuit breakers will likely see more winning orders , so the textile, chemical, heavy industry and construction businesses are forecast to maintain a balanced growth.
Hyosung Joins ‘1 Trillion Won Operating Profit’ Club
The business group chalked up more than 1 trillion won in operating profit in 2016, the first time it surpassed the milestone since its founding in 1966. Hyosung maintained steady growth in all businesses ranging from conventional mainstay synthetic fibers to heavy industries and chemical business.
The company’s charming business performance last year was owed to the strengthening of its mainstay products - spandex and tire cords - in the global market. Each business division logged steady growth in operating profit. The ratio of operating profit was 30.7 percent for textiles, 21.5 percent in industrial materials, 18.6 percent in heavy industries, and 14.5 percent in the chemical business division. However the group saw the portion of operating profit for the textile business division covering spandex plunge from 45 percent in 2015 to 30.7 percent.
The 2016 results have shored up Hyosung Group Chairman Cho’s control over the group, according to analysts. The junior Cho recently took the helm of the group from his father, Cho Suk-rae. The 82-year-old senior Cho is ailing.
Hyosung announced the results of its 2016 business performances on Jan. 2. The group posted 11.9291 trillion won and 1.0163 trillion won in sales and operating profit in 2016. It is the first time Hyosung topped 1 trillion won in operating profit, and the group saw a best-ever ratio of operating profit stand at 8.5 percent last year.
Hyosung saw sales decline 4.2 percent in 2016 over the previous year to 11.9291 trillion won. The group’s trading business division suffered a setback due to the sagging steel sector, but the group reaped steady operating profits in such mainstay businesses as textile, industrial materials, heavy industries and chemicals.
The business division posting the biggest operating profit was the industrial materials business division that covers tire cords. The division saw operating profit surge 48.7 percent over the previous year to 218.6 trillion won in 2016. Hyosung, taking up a 45 percent share in the global tire cord market, has reaped a steady operating profit. The heavy industries business division saw operating profit jump 24.1 percent to 189 billion won in 2016, while the chemical business division reaped 147.1 billion won in operating profit thanks to the expansion of polypropylene business.
