Hyosung Corp., a South Korea based leading chemical and textile company plans to ramp up its annual spandex production capacity in Vietnam to 80,000 tons from current 50,000 tons, a move that will make the plant to become its largest spandex manufacturing production base, and gradually increase the tire cord production capacity from current 100,000 tons per year.
Hyosung Corp. is expected to up investment in Vietnam after its operation in the Southeast Asian country delivered the most impressive earnings among its subsidiaries last year.
The company that has mainly produced textiles and industrial materials in Vietnam since it built its first factory in the Southeast Asian country ten years ago will add chemical production facilities in the country. It plans to invest total $1.2 billion in Vietnam, building natural gas-fueled polypropylene (PP) and propane dehydrogenation (PDH) plants, as well as liquefied petroleum gas (LPG) storage infrastructure in Cai Mep Industrial Zone near Ho Chi Minh.
According to the Financial Supervisory Service on Wednesday, Hyosung raised 148.7 billion won ($131 million) in net profit from its Vietnamese business for full 2016. It is the best earnings among the 26 subsidiaries under the chemical and textile giant. Its sales reached 1.1 billion won, exceeding the 1 billion won mark for the third straight year.
The Vietnamese operation posted such stellar earnings despite worries that the textile industry in the Southeast Asian country would take a direct hit from Washington’s withdrawal from Trans-Pacific Partnership (TPP) trade agreement, in which all 12 member nations agree to eliminate and reduce tariffs, under its President Donald Trump’s vow to give priority of benefits to the U.S. economy.
Korean companies had aggressively upped their investment in the Vietnamese textile sector on expectations that they would take advantage of the TPP pact that would lower tariffs on their products exported from the Southeast Asian country to the U.S. and other member countries. Korea is not a member of the agreement. Following the U.S. decision to walk away from the trading agreement, most Korean companies have pushed back their investment plan in the Southeast Asian country.
The Vietnamese government encouraged by recent robust sales has introduced a slew of measures to attract foreign investment.
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