Location: Seoul, Korea
Sales: $150 million
Gumi, Kyungsang-Bukdo, South Korea; Nantong, Jiangsu, Province, China
Y.K. Lee, president and CEO; Y.K. Kim, Vice president/head of fiber division; Yasuhiko Tanabe, senior director/fiber division
W.S. Chun, Senior vice president/Spunbond division; J.N. Kim, president of TPN; W.C. Hwang, director of TPN
Spunbond PP (SS, SSS, SMS, SMMS, bicomponent), PET (embossed and needlepunched)
Hygiene, medical, protective markets, industrial specialties, agricultural, upholstery, filtration, PP/PE bicomponents, geotextiles
With a new name and an ambitious growth strategy, Korean nonwovens producer Toray Advanced Materials Korea (TAK), formerly known as Toray Saehan, continues to focus on Asia for its nonwovens growth. The company officially changed its name on May 1, two years after its parent company, Toray Industries, purchased former partner Saehan’s stake in the venture. At the same time, the company announced a new growth program, called Vision 2020, targeting sales of $3 billion by 2020. These sales will not only be in nonwovens but in a number of to-be-launched areas including water treatment, carbon fiber and renewable energy.
Within the group’s nonwovens business, which reported sales of $150 million last year, investment in spunmelt technology continues. The company currently makes 54,000 tons of nonwovens in Korea as well as 18,000 tons at its Chinese subsidiary, Toray Polytech Nantong. Executives expect future investment in China or other parts of Asia is more likely than in Korea.
“We are preparing aggressive investment in China and Asia based on demand situation for the long term. The Korea mill does not have expansion plan but it will place more focus on high value products for better profits for the short- and mid-term strategies,” said Jin Kim, southeast Asian market manager for the spunbond export team.
In China, TPN reported that line number one, a Reifenhauser SXMMS 4.2 meter line, reached full capacity last year, supplying 18,000 tons of nonwovens to the Chinese and other Asian markets. Plans for a second Chinese line were temporarily shelved by the company due to raw material price challenges and economic concerns but sources say a second line, with 21,000 tons of capacity, will start in April 2011. “This plan is not only to cover local Chinese market growth but also to cover fast growing Asian markets including Korea, Japan and Taiwan which are already matured markets in the hygiene business,” Mr. Kim said.
While the company had been serving the Chinese market, including several global players, for some time, before opening the Chinese mill in 2008, sales volume has increased significantly there since then, Mr. Kim added. Currently, about 19% of its total sales are conducted in China. Korea represents 37% of sales while the rest of Asia contributes 44%.
From an economic standpoint, the company notices several big differences between the different regions of Asia—Far East, Southeast, Central and Southwest—and therefore business strategies reflect these differences. For example, Japanese customers are looking for better and more unique nonwoven-based products than customers in other parts of Asia.
In addition to meeting different appetites for nonwoven customers, a challenge doing business in Asia is responding to the explosive growth of the business. “We expect and see that the personal care market will grow continuously in Asia and our concern is how we can catch up with this explosive growth in the hygiene market,” Mr. Kim said.
In fact, this growth—among both global players and local converters—is so strong that the company fears its second Chinese line, despite its large size, won’t be able to meet demand.
“Our first priority is the Chinese market at this moment and our expansion plan is related to China’s hygiene market growth. Therefore, it is obvious that we will continue to invest in China. In the meantime, we are also considering investing outside of Korea and China since we are being informed that many of our customers are seriously thinking of investing into other countries where they are not doing their business,” Mr. Kim said.