Samyang Speeds up Diversification
Engineering plastics business lines being expanded to strengthen overseas production
Samyang Corp. is in the process of changing its core business portfolio by expanding its engineering plastics manufacturing as one its core futuristic growth engines on top of its traditional foodstuff production.
Chairman Kim Yoon looked far into the company¡¯s future and decided to jump into the production of bisphenol-A (BPA), a key material for engineering plastic, a totally different business area from the one that the company has been engaged in for a long time.
The CEO plans to continue to expand the chemical sector of the company¡¯s business portfolio, which accounts for 30 percent of the company¡¯s annual sales, taking it on as its futuristic growth engine.
Kim has often traveled to Gunsan, North Jeolla Province, where the new BPA plant is being built and is slated for completion next year, which will finish the BPA-polycarbonate engineering plastic value chain for the company.
It¡¯s been 20 years since the company entered the engineering plastic manufacturing field. The plastic is harder than steel and can be made thinner than aluminum plate. It is also more resistant to various chemical fluids than gold and silver, a characteristic quite different from general plastics, which is why it is used in auto parts, high-tech electronic products and precision machinery.
Samyang looks toward increasing exports of the product abroad under a strategy to be a global player in the area of engineering plastics in the days ahead. The company will also expand the production capacity of its Shanghai plastic engineering compound plant to 15,000 tons annually and build plants in Europe and North America.
Samyang officials said the Shanghai plant set up in 2004 needs to be expanded to cope with increased demand and a new plant will be built in Europe as part of the global strategy for the engineering plastics business for the company. The global market for engineering plastics amounts to 4 million tons annually, valued at 12 trillion won with the domestic market accounting for 300,000 tons worth 900 billion won. Samyang plans to take a 55 billion won share of the market this year by focusing on the production of plastics for auto head lamps and handles, among others, for both domestic and overseas makers of that equipment.
The requirement for plastics for those auto parts, especially for head lamps is likely to hike the demand as many automakers have turned to plastic head lamps instead of glass.
SamyangKasei, set up in 1989, plans to expand its production of polycarbonate to meet the increased demand for the product, particularly in the automobile industry, as more and more automakers want to use the product to make their cars environmentally friendly.
Samyang officials said the technology to produce resins mixed with PLA extracted from corn makes the product environmentally friendly and the company has been in discussions with both Hyundai Motor and Kia to use the product for the interiors for their cars.
They said engineering plastics are increasingly being used by automakers around the world and even PET bottles are recycled to be used as environmentally friendly plastics for electric and hybrid cars.
Samyang has been stepping up its activities to seek an expanded share of the global market for its products. In 2007, the company launched an office in San Diego, California, to market engineering plastics to U.S. customers whose market has grown to 5,000 tons per year from 1,500 tons in 2007. The San Diego office will also be used as a launch pad for the company¡¯s advancement into Central and South America in the future as the company plans to increase annual sale of the product to 1.6 trillion won. Samyang¡¯s non-food stuff business lines include textile materials for industrial use, ion exchange resins, PET bottles and recycled PET bottles.
Samyang set up the Samyang Inochem as a joint venture with Mitsubishi Corp. of Japan to take charge of producing polycarbonate at its new plant being built in Gunsan. nw
Chairman Kim Yoon of Samyang Corp.