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    Features

    Toray Advances In Asia

    With four lines in China and two in Indonesia, this Korean company is intent on being Asia’s largest nonwovens manufacturer

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    Karen McIntyre, editor02.18.16
    Well on its way to becoming Asia’s largest producer of nonwoven fabrics, Korea’s Toray Advanced Materials, once a joint venture between Toray Industries and Saehan, is working hard to meet the needs of the Asian consumer. While investment in Korea has slowed, the company has been adding new lines in China and Indonesia since 2006, making it one of Asia’s largest suppliers of spunbond nonwovens.

    Exports manager Evan Lee says the decision to invest in China and Indonesia was the result of discussions with its key customers about where to find the best business opportunities.

    “After talking to our customers, we made a decision to invest in the spunbond business and expand our business to China and Indonesia and became a major supplier in Asian nonwovens business,” he explains. “Although many nonwovens makers experience tough periods due to over-supply issues, severe competition and pressure of price-downs, we are always finding a new chance to break through.”

    This market knowledge—and a little bit of confidence—is what influenced Toray to be so aggressive in expansion, a strategy that is paying off. In 2014, the company’s sales increased 18% to $342 million, thanks to better-than-average growth out of its operations in China and Indonesia. Meanwhile, sales out of Korea grew only in the single digits.

    Toray established the Chinese operations in Nantong in 2006 and added its second and third lines in 2010 and 2012. The fourth line, finished in 2015, brought the site’s total capacity to 77,000 tons reportedly making it China’s largest nonwovens operation.
    “China is one of the most quickly developing hygiene markets in whole world,” Lee says. “This trend influenced spunbond makers to expand capacity and newcomers enter, creating an oversupply situation in the spunbond market, but on the bright side the change of one-child policy and increasing premium market will give us new opportunity to expand our Chinese business.”

    Toray predicts that the market for disposable diapers will grow from 14 billion pieces in 2012 to 38 billion pieces in 2020 due to improvements in people’s lifestyles. This trend will influence major hygiene producers to expand their existing facilities and break ground on new facilities in new regions.

     “We’ve been making solid business partnerships with global and local diaper makers for a long time,” Lee says. “Our target is to construct a supply chain to meet the needs of our customers throughout Asia,” Lee adds. “When we consider expanding a business, we listen to a customer’s business plan and try to find a way to grow together. We have various business channels for not only global makers but also local customers, so every customer could give our business a chance.”

    Elsewhere in Asia, Toray as already announced plans to add a second line to its Indonesian site, just 18 months after the site began operation in June 2013. This new line will double capacity at the site in September 2016.

    “Indonesia is the most populous country among Southeast Asian nations and has a strong growing force especially in the hygiene market. Besides, here is good regional position to expand our business to South Asia. Therefore we trust that this decision was a very successful part of our Asian expansion strategy.”

    In the past, Toray has hinted that expansion into another Asian country will be the next step in its growth strategy but executives have remained coy on the details saying only that they will advance the business continuously as warranted by market needs and customer growth does.

    “China and Indonesia are still very attractive markets for us, so we are willing to focus more on this market now. But we’re always considering new chances in another region,” Lee says.
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