Chairman Cho Hyun-joon of Hyosung Group is seen on his recent visit to the Spandex plant in Kumi, North Gyeongsang Province.

Chairman Cho Hyun-joon of Hyosung Group said he will steer the group to becoming a global conglomerate with an operational beachhead in Vietnam.

The group, he said, chose its Vietnam legal entity to be the advance post for its globalization as an overseas production center for the group’s major products (including Spandex and tire codes), after concluding that China could no longer play that role because of rising wages and other worsening business conditions.

As a result, Vietnam Hyosung has become the core mobile power base for the group to help achieve a second leap forward in the second half of the 2000s. Its annual sales amounted to only 6 billion won in 2008, but increased enormously by 2014 to over 1 trillion.

Since 2007, Hyosung started turning out such key products as Spandex, steel and tire codes at its Vietnam complex and continue to expand their production facilities. In 2015, the group had to buy land near the complex in Vietnam to set up Dongnai Hyosung to produce tire code and Spandex to expand the production of those products. The group also expanded the production of Nylon and electric motors in Vietnam. Dongnai Hyosung has become the largest producer of raw materials for Cleora, the PTMG.

The group has been able to boost its competitive edge internationally by turning out three major products from its lone production base in Vietnam, such as tire code, steel code and bid wire.

Hyosung Group said on Sept. 11, 2016 that its head of Strategic Headquarters (president) Cho Hyun-joon met Dinh La Thang, general secretary of the Communist Party of Ho Chi Minh City, Vietnam and Le Van Khoa, vice mayor of Ho Chi Minh City at Lotte Hotel, Seoul on Sept. 9. The general secretary Dinh has the authority to make final decisions in the Vietnamese communist party.

At the meeting with the Vietnamese leaders, Cho said, “Hyosung has grown Vietnam as its largest production base in the world for products such as spandex and tire cord with highest market shares by focusing its investment on the southern part of Vietnam,” adding, “We are going to closely cooperate in information technology including automated teller machines, as well as in infrastructures such as petrochemistry, electricity, and water supply and drainage.”

Replying, Dinh said Hyosung has created quality jobs in Vietnam, adding, “We hope Korean businesses will be active to make investment for the development of Ho Chi Minh,” according to the South Korean textile company.

Hyosung has made an investment of about $1.2 billion (1.327 trillion won) in an industrial cluster at a distance of one hour by car from Ho Chi Minh since 2007 to establish its main production base specifically for overseas exports. It employs about 6,000 locals and accounts for some 0.7 percent of the country’s yearly export amount, making a significant contribution to its economy.

Korea’s leading textile and chemical firm Hyosung Corp. will construct natural gas-fueled polypropylene manufacturing and liquefied petroleum gas storage infrastructure in Vietnam at a cost of $1.2 billion, a move that would sharply ramp up its production capacity in the widely applied versatile plastic.

According to the firm Tuesday, the company signed a memorandum of understanding with Vietnam’s government to invest $1.2 billion to create a manufacturing and storage complex in Cai Mep Industrial Zone in Tan Thanh District, Ba Ria-Vung Tau Province.

Under the deal, Hyosung will carry out the building project in two phases. In the first phase, the firm will build an LPG storage facility for $133 million, and a polypropylene plant at $336 million. The second phase involves building propane dehydrogenation plant for $496 million and expansion in the PP plant for $226 million. 

A view of Hyosung Group’s Spandex plant in Vietnam.(Photos: Hyosung Group)