The aramid production building at Kolon Industries' Gumi factory. [Kolon Industries]
The aramid production building at Kolon Industries' Gumi factory. [Kolon Industries]

Kolon Industries and HS Hyosung Advanced Materials, the two dominant players in South Korea's synthetic fiber industry, are staging a comeback after a prolonged earnings slump. Both companies posted a first-half rebound this year, driven by a broad-based recovery across their core tire cord business and growth segments including aramid and carbon fiber.

Kolon Industries recorded operating profit of 160.7 billion won ($113 million) in the first half of this year, up 122.4 percent from 72.2 billion won in the same period last year. Sales rose 4.17 percent to 2.59 trillion won over the same period.

HS Hyosung Advanced Materials posted first-half sales of 1.78 trillion won and operating profit of 112 billion won, up 5 percent and 3.9 percent, respectively, from 1.7 trillion won and 107.9 billion won a year earlier. First-quarter earnings fell year-on-year, but a stronger-than-expected second quarter drove the overall rebound.

Both companies had struggled for an extended period amid deteriorating downstream industries and mounting domestic and external uncertainties. Kolon Industries' operating profit declined for four consecutive years from 2021. HS Hyosung Advanced Materials' operating profit last year came to 157.4 billion won, down 28.4 percent from 219.7 billion won the year before.

The turnaround was driven in large part by improved profitability in tire cord, one of each company's core businesses. The price of polyethylene terephthalate (PET), the key raw material for tire cord, rose more than 1.5 times in roughly six months, and both companies passed the increase through to product prices, lifting earnings. HS Hyosung Advanced Materials, the global leader in tire cord, posted second-quarter tire cord sales of 549.3 billion won — its highest quarterly figure since 2022.

Growth businesses also contributed to the rebound. The aramid segment, which both companies operate, had long struggled against headwinds including a downturn in downstream industries such as telecommunications cables and aggressive capacity expansion by Chinese rivals. This year, however, a recovery in infrastructure investment revived downstream demand and aramid orders began to pick up. Kolon Industries' aramid factory is now running at effectively full capacity, according to industry sources.

The carbon fiber market, HS Hyosung Advanced Materials' flagship new business, is also recovering. After securing new customers in drones and wind turbine blades, the company's carbon fiber sales volume rose 40 percent quarter-on-quarter in the second quarter. HS Hyosung Advanced Materials' combined carbon fiber and aramid sales in the first half reached 146.7 billion won, up 15.1 percent from 127.5 billion won in the same period last year.

Tire cord being produced at HS Hyosung's tire cord factory in Vietnam. [HS Hyosung Advanced Materials]
Tire cord being produced at HS Hyosung's tire cord factory in Vietnam. [HS Hyosung Advanced Materials]

Both companies plan to sustain their momentum by developing additional growth businesses. Kolon Industries is focusing on modified polyphenylene oxide (mPPO), a high-value material used as a key component in copper-clad laminates (CCL) that offers superior power-saving performance. As rapid growth in AI semiconductors has sharply increased demand for CCL, customer interest in mPPO has been rising.

To meet that demand, Kolon Industries completed the mechanical commissioning of its mPPO factory in the second quarter. The new production line is expected to begin full-scale operation as early as the third quarter after a ramp-up period. "Testing with Korean customers for Kolon Industries' mPPO will be completed by the end of the fourth quarter," said Hwang Gyu-won, an analyst at Yuanta Securities Korea.

HS Hyosung Advanced Materials is working to enter the silicon anode material market. Silicon anode materials offer up to 10 times the energy density of graphite anode materials and are considered a next-generation battery material. The company plans to build a silicon anode material factory in Ulsan by next year.


yeongdai@heraldcorp.com