Make Aggressive Investments in 5G and Electric Vehicle Markets by Doubling “Aramid” Output

Kolon Industries to Make Aggressive Investments in 5G and Electric Vehicle Markets by Doubling “Aramid” Output

▷ Doubling annual output to 15,000 tons once again in 3 years

▷ Investing proactively in response to rising demands for 5G cables and ultra-high performance tires for EVs

▷ Solidifying Kolon Industries’ top position in the global aramid market

Kolon Industries (CEO Hee-Goo Jang) is making strides towards high tech industries such as 5G and electric vehicle by ramping up its output of aramid fibers (brand name: Heracron) by 50 percent. Aramid fibers are a high-strength material 5 times stronger than steel and can withstand high temperatures of 500 degrees Celsius.

The Korean chemical and textile company announced its aramid annual output will increase from the current 7,500 tons to 15,000 tons by expanding its aramid fiber production line in Gumi, North Gyeongsang Province, by 2023. This is a large-scale investment aiming to double capacity once again in 3 years, after the company expanded the facility’s capacity by 50 percent in 2017. The textile and chemical unit of Kolon Group is preparing preemptively to increasing demands in the high-tech industries, particularly 5G network and EV, by expanding the facility once every 3 years since 2017. It aims to consolidate its top position in the global aramid market and close gaps with leading businesses through the expansion work.

The global aramid market is growing significantly, driven by sharp rises in 5G network infrastructure demands. Characterized by high strength and tensile strength, aramid fibers are a reliable reinforcing material that supports optical cables for 5G networks. Increases in online data usage due to the spread of contactless lifestyles since the COVID19 outbreak also prompted the growth of the aramid market.

Another driver of market expansion is the rapid increase of EV supplies. Demands are rising for ultra-high performance (UHP) tires since EVs are heavier than internal combustion engine-powered vehicles but have a stronger acceleration power than the latter. Aramid tire cord demands to be applied to HUP tires are expected to skyrocket with the expansion of high-performance car markets such as EV.

Aramid fibers from the new production lines will also be applied to Kolon Industries' flagship tire cord products and are expected to create a high synergy effect between businesses. Additional production lines operate as a smart factory, equipped with digitalized and automated systems of production facilities — a sensor-based real-time process analysis system at every production stage is adopted. Moreover, big data collected on the lines are used to build know-how in production technology such as quality and production efficiency improvement.

Kolon Industries' aramid business is a key growth engine, continuously generating high profits and leading future growth. Demands for high-tech industrial materials such as 5G telecommunication infrastructure have increased significantly since 2019 and the company has obtained global competitiveness mainly in the North American market, achieving a 100 percent utilization rate and sales rate. This proves that Kolon Industries' aramid product quality has been globally recognized as top-tier.

The company began research to develop its own aramid fiber in 1979, and then released its own product under the brand name of “Heracron” in 2005 after establishing a production facility for the third time in the world. Kolon Industries has been running its aramid fiber production lines at full capacity since 2017, successfully increasing its global client base, and is recording remarkable growth even during COVID-induced industrial downturns based on its competitive edge in quality. The global aramid fiber market is projected to grow more than 6 percent annually over the next 5 years from the current 70,000 tons in terms of supply.

Aramid fiber is a type of heat-resistant and strong synthetic fiber. It is a cutting-edge fiber with high strength and tensile strength: its tensile strength is 5 times stronger than iron of the same weight and withstands repeated heating above 500 degrees Celsius. The material is used in the military as ballistic-rated body armor, protective apparel, tire reinforcements, and friction materials (brake pad).

"The decision points to the determination of Kolon Industries to increase its market dominance with aggressive investment. We will continue to generate high profits by responding quickly to increasing demands in the global aramid market in the post-COVID19 era.”, said Ey-Goo Kang, head of the Heracron business. The company is considering another mid-to long-term investment in its aramid (Heracron) business after the current expansion.