Kolon Industries Completes Expansion of Vietnam Tire Cord Factory..."Overseas Business Expansion"

Expansion of Production Volume... Achieving Economies of Scale
Strengthening Market Dominance
Expansion of 19,200t Capacity
Total Production Capacity of 103,200t Maintained

Exterior view of Kolon Industries Vietnam Tire Cord Factory. Photo by Kolon Industries

[Asia Economy Reporter Choi Seoyoon] Kolon Industries has completed the expansion of its tire cord production plant in Binh Duong Province, Vietnam, and is accelerating efforts to expand its presence in the global market.

Kolon Industries announced on the 28th that it has completed the expansion of its polyester (Polyester·PET) tire cord production plant in Binh Duong Province, Vietnam, with an annual capacity of 19,200 tons.

This is the second investment following the completion of the Vietnam PET tire cord plant with an annual capacity of 16,800 tons in 2018. Through this expansion, the existing production capacity of 84,000 tons increased by 19,200 tons, securing a total production capacity of 103,200 tons. This corresponds to 15% of the global tire cord market.

Tire cords are high-strength fibers woven into fabric form that serve as the skeleton inside tires, acting as fiber reinforcements that affect the safety and performance of automobiles. Depending on the raw materials, tire cords are divided into PET, Nylon, Rayon, and Steel tire cords. Kolon Industries produces PET tire cords mainly used in passenger car tires.

The Kolon Industries tire cord plant located in Bau Bang Industrial Park, Binh Duong Province, Vietnam, has introduced the latest production facilities throughout the entire process, establishing an integrated production system from yarn production to weaving, processing, heat treatment, and finished products. The Vietnam plant is currently operating at full capacity as quality approvals from global tire manufacturers have been completed, and it is expected that production efficiency will be significantly improved through this expansion.

The expansion of Kolon Industries' tire cord business aligns with the growth of the global tire market. The tire market has continued its upward trend with increased demand for replacement (RE) tires last year and increased shipments of new original equipment (OE) tires this year. According to an automotive market research firm, the tire market is recovering to pre-COVID-19 levels starting this year and is expected to show an average annual growth rate of around 4% thereafter.

In particular, the growth of the electric vehicle market is driving an increase in tire cord usage. Electric vehicles are characterized by high output and low noise but are equipped with batteries weighing about 400 kg. Tires for electric vehicles require excellent performance such as high load support, low rolling resistance, low noise, and wear resistance, leading to the use of 10-20% more tire cords compared to conventional tires.

According to data released earlier this year by EV Volumes, a global electric vehicle market research organization, global electric vehicle sales reached approximately 6.5 million units in 2021, a 108% increase from 3.1 million units in 2020, and sales are expected to exceed 10 million units this year.

Since starting its tire cord business in 1973, Kolon Industries has built business competitiveness through partnerships with global major tire companies such as Michelin, Bridgestone, and Hankook Tire. Following the establishment of a plant in Nanjing (南京), China, in 2004 to establish a foothold in the Chinese market, Kolon Industries secured a production base with top technology and price competitiveness through its first and second investments in Vietnam and plans to devise various strategies to dramatically enhance its global competitiveness.

Park Gyudae, head of the automotive materials division, said, “Through this expansion, we will realize economies of scale and strengthen market dominance based on differentiated technology. We also plan to continuously expand sales of high-performance, high value-added premium products to enhance the profitability of the tire cord business.”