Sometimes, a different route will get you faster and closer to your destination. That is what Hyosung pulled off when it decided to focus on a new market that it believed offered wider potential — Vietnam.
Founded in 2007, Hyosung’s Vietnam subsidiary stands at the heart of the company’s overseas operations and successful growth, focusing on the production of Hyosung’s core products including spandex, tire cords, steel cords and electric machinery.
Hyosung’s foray into Vietnam was spearheaded by Chairman Cho Hyun-joon, who foresaw the approaching difficulties like rising labor costs, raw materials prices and growing competition that would eventually hit major markets such as China.
Cho set eyes on Vietnam as a strategic location for producing Hyosung’s core products. And with optimized operations and favorable business conditions, Hyosung Vietnam has grown at an exponential pace.
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(Hyosung) |
Hyosung Vietnam’s revenue stood at just 6 billion won ($5.36 million) in 2008. It swung to profit the following year and broke the 1 trillion won revenue mark in 2014. Last year, it recorded a revenue of 1.13 trillion won and a net profit of 148.7 billion won.
Vietnam is widely considered to be Asia’s next economic tiger, a fast-growing economy with sufficient financial and regulatory support for foreign businesses.
Hyosung has been working to optimize its operations in Vietnam, adding new production facilities in the southern province of Dong Nai where it operates.
With the expansion, the company began producing not only its main products like spandex and tire cords but also motors, nylon and PTMG, the base material used to produce spandex, Hyosung said.
In doing so, Hyosung has streamlined its spandex production from start to finish, as it can now produce its own PTMG, cutting down costs.
On the industrial equipment front, Hyosung Vietnam is the only company in the world able to produce tire cords, steel cords and bead wires on a single production site.
Its motor business is also slated to become a steady profit generator in the future as Hyosung is looking to produce and sell high-efficiency and premium motors in Vietnam where many low-power motors are being replaced.
By Sohn Ji-young (
jys@heraldcorp.com)
