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[Alpha Biz=(Chicago) Reporter Kim Jisun] It has been confirmed that Hyosung Chemical is considering withdrawing its nylon film production line in Korea. The main reason is the continued deficit.
According to the industry on the 20th, Hyosung Chemical is currently considering ways to organize domestic nylon film production lines. Hyosung Chemical is currently producing nylon films in Daejeon and Gumi factories and Guangzhou, China. Annual output at home and in China exceeds 12 000 tons.
It is reported that the domestic production line is being discussed to maintain the Chinese plant instead of withdrawing it. A Hyosung official said, "It is right to consider withdrawing the domestic production line, but there is no decision yet, such as withdrawal."
Nylon film is widely used as a packaging material for household goods due to its excellent shock strength and oxygen blocking. Hyosung Chemical entered the nylon film business in 1996. Hyosung Chemical's Nylon Film holds the largest market share in the domestic market.
Behind Hyosung Chemical's consideration of withdrawing its nylon film production line in South Korea is its poor performance. In the aftermath of COVID-19, the front-line business where film and other products are used has been deteriorating for a long time. The production facilities of polypropylene (PP) and propane dehydrogenization (PDH) in Vietnam, which Hyosung Chemical invested $1.28 billion (about KRW 1.6 trillion), were not properly operated for a while due to facility defects.
Hyosung Chemical is in the red for six consecutive quarters from the fourth quarter of 2021 to the first quarter of this year. Stock markets predict Hyosung Chemical will post a deficit (-47.7 billion won) in the second quarter of this year.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
