Providing new inspiration to people across the continents
[A global art show entitled “Inspiring Journey”]
New discoveries that make our lives more comfortable and full of happiness["Let's go camping park" sponsored by KOLON SPORTS]
Innovative products and services that touch the hearts of customers
[KOLON SPORTS’s 2013 Spring/Summer Collection Exhibition in Beijing]
Advanced technology that pushes the boundaries of our imagination
and shapes a brighter future
[The first hydrocarbon resin plant in Korea.
"Ulsan Plant of KOLON INDUSTRIES"]
KOLON Plastics (CEO Kim Yeong-bom) participated in CHINAPLAS 2018, which opened on the 24th in Shanghai, as an extension of its efforts to advance further into the Chinese market. At this exhibition, KOLON Plastics showcased a variety of cutting-edge products including the world-class eco-friendly POM, key materials for weight reduction of vehicles, and advanced composite materials for diverse applications.
The exhibition space was themed after “Future Envisioned by KOLON” and consisted of the POM Zone introducing the world’s largest POM production plant, the Automotive Zone showcasing the wide range of materials for automotive parts, and the Need & Solution Zone highlighting the company’s efforts to find breakthrough solutions for customers.
The most notable feature within KOLON Plastics’ booth was the massive car replica, which displayed automotive parts applied to current vehicles and those of the future. The Need & Solution Zone exhibited the connector and high-voltage electric insulator* expected to be used as key parts of electric vehicles in the near future, a hydrolysis-resistant material** with its physical properties remaining unchanged even in the environment of high temperatures and humidity, technologies applied to electronic automotive parts and alternatives to metals, and 3D-printed materials designed to engage more customers in an emotional way. KOLON Plastics also unveiled low-odor POM, which succeeded in reducing the discharge of VOCs by 25% to 0.5ppm or less. KOLON Plastics’ world-class POM is evaluated to be environmentally responsible as it releases almost no harmful substances during processing and as a finished product.
KOLON Plastics has continued to reinforce its presence in the Chinese market since the opening of its Beijing branch in 2010. It opened the Shanghai branch last year and has focused on expanding the pool of new corporate customers in the local automotive market. KOLON Plastics aims to raise its sales in China by 40% compared to the previous year on the back of many positive external factors. For instance, it has an advantageous position as China’s Ministry of Commerce imposed a lower rate of anti-dumping duty than its competitors in October last year.
Furthermore, the POM production plant jointly constructed in Gimcheon, Gyeongsangbuk-do, with Germany’s BASF (with the ratio of 50:50) is scheduled to go into full-scale operation in the second half of this year. Once the plant is completed, KOLON Plastics will be equipped with the total POM production capacity of 150,000 tons per year, which is the world’s largest scale. It is also expected to help KOLON Plastics achieve the world’s highest competitiveness based on improved production efficiency and reduced production costs.
CEO Kim Yeong-bom said during his visit to the exhibition, “We showcased a diversity of technologies developed by KOLON Plastics for electric vehicles and vehicle weight reduction at this exhibition. We believe that the completion of the POM production plant being constructed in association with BASF in the second half of this year will lead to an increase in the distribution of our globally recognized POM products and ultimately accelerate our company’s growth.”
CHINAPLAS is Asia’s largest and one of the world’s top two exhibitions for the plastic and rubber industries, and this year’s CHINAPLAS was staged at the National Exhibition and Convention Center (NECC) in Hongqiao, Shanghai, from April 24th to April 27th, with the entire exhibition floor space measuring 320,000㎡. It drew about 4,000 companies from 40 countries and more than 150,000 visitors.
“Space creates a framework for culture unique to an organization. KOLON One & Only Tower was meticulously designed to help all employees better communicate and cooperate with each other. It is expected to rewrite the history of KOLON’s convergence R&D and serve as a foundation upon which KOLON’s brighter future can be shaped.” (Chairperson Lee Woong-yeul)
KOLON Group (Chairperson Lee Woong-yeul) secured another strategic stronghold in Magok District of Seoul. Three major subsidiaries of KOLON Group, including KOLON Industries, celebrated their move into KOLON One & Only Tower newly constructed within Magok District on April 16th and began their full-scale operations.
KOLON One & Only Tower boasts a total floor area of 76,349㎡. It is comprised of three wings (Research Wing with eight stories above ground, Administration Wing with ten stories above ground, and Pilot Wing) and has four basement floors. It took approximately 30 months for its completion after the groundbreaking in 2015. It will accommodate over 1,000 employees, including R&D staff members of KOLON Industries, KOLON Life Science, and KOLON Glotech as well as employees from KOLON Group’s headquarters, and play an instrumental role in R&D.
The name KOLON One & Only Tower fully reflects the core values of Chairperson Lee’s management policy. “One & Only” conveys the message that all KOLON employees should strive to equip themselves with differentiated capabilities and skills to retain the industry’s best competitiveness and to earn the trust of customers.
KOLON One & Only Tower is designed to serve as the advance base of convergence R&D to create greater value for the Group. The research staff of KOLON Industries and KOLON Glotech – frontrunners in the chemical material sector – and KOLON Life Science – the leader in the global bio industry that released Invossa, the world’s first gene therapy for osteoarthritis – will be brought together and execute joint projects while also conducting individual studies. Vice President Han Seong-su, the former director of the Research Institute of Eastman Chemical Company of the US, was recently recruited as the director of the KOLON Future Technology Research Park and KOLON Group’s CTO in charge of supervising R&D and promoting synergy among KOLON companies.
KOLON One & Only Tower accommodates staff of diverse sectors from R&D to sales, marketing, and administrative assistance. This enables sales and marketing staff members to promptly share ideas and information generated by R&D and make instrumental decisions in a timely manner. KOLON has consistently pursued CFC (cross-functional communication) aimed at promoting communication and cooperation regardless of position, job task, and subsidiary, and the completion of KOLON One & Only Tower is expected to further advance this quest.
The Tower boasts a unique design and structure and stands apart from other buildings in Magok. Its façade is adorned with a motif similar to the pattern seen when stretching knitwear. It was not easy to install the decorative feature to the façade due to its weight, but a breakthrough was found through the combination of Heracron – KOLON Industries’ aramid brand – and the cutting-edge GFRP (glass fiber reinforced plastic). One of the most impressive interior features is the grand stairway. It is an important passageway that connects all the floors and a multipurpose space that can be used to stage conferences, lectures, and exhibitions.
Another notable advantage of KOLON One & Only Tower is its energy-saving system that utilizes eco-friendly energy sources. The Tower was designed as a zero-energy building with thermal efficiency maximized through air conditioning with solar energy, natural radiant heat, and geothermal heat, which has drastically reduced energy consumption in communal spaces based on systems and designs for air recirculation. In recognition of these innovative features, the Tower will be given Gold among the four rating levels of LEED (Leadership in Energy and Environmental Design) at the end of this year.
The Tower was designed by Morphosis Architect, which is globally renowned for atypical architecture. Morphosis Architect is led by Thom Mayne, the 2005 winner of the Pritzker Architecture Prize, often dubbed the Nobel Prize of architecture. Mayne designed the Tower himself.
KOLON One & Only Tower also serves the venue of diverse community outreach programs. Ecolonglong Cube, an eco-friendly energy exhibition and experience hall, will open on the first floor of the Pilot Wing in May as part of Ecolonglong, KOLON’s widely recognized program that visits schools and provides education on eco-friendly energy sources. Hello Dream, KOLON’s longstanding volunteer program, has been further expanded to serve four community child care centers in Gangseo-gu. We also plan to open the tentatively named Space K Magok Art Museum next year within Magok District to help build culturally richer communities in Gangseo.
KOLON Group first began its operation in Tongui-dong and relocated to Mugyo-dong. It has been headquartered in Gwacheon since 1997. At present, KOLON Global in Songdo, Incheon, and KOLON Industries’ fashion business in Samsung-dong in Gangnam are serving as the strongholds in each region along with the Group’s headquarter in Gwacheon. KOLON One & Only Tower is the Group’s fourth strategic stronghold.
KOLON Industries revealed through its earnings (tentative) announcement on the 9th that it recorded KRW 1.2469 trillion in sales and KRW 52.4 billion in operating profit in Q4 of 2017. Net income before income tax expenses and quarterly net income are KRW 35 billion and KRW 20.2 billion, respectively (net income based on IFRS).
Sales in Q4 of 2017 rose compared to the previous quarter powered by an increase in the sales volume of its fashion business during the high season. Operating profit also rose compared to the previous quarter due to an upturn in the fashion business but only slightly because of an increase in the prices of raw materials in the manufacturing business and the falling exchange rate.
KOLON Industries continues to generate positive results in sectors of strategic importance, including tire cords, airbag cushions, and petroleum resin. It has also worked hard to improve its performance in its other business sectors by expanding sales volume and increasing prices. Although it is projected to be influenced by an increase in raw material prices and the falling exchange rate to a certain extent in Q1 of 2018, it plans to proactively respond to external risks by seeking to raise the prices of its major products and expand its sales volume.
The outlook for 2018 remains positive. It is anticipated that the issues of inventory disposal and China-incurred risks, which triggered the aggravation of some subsidiaries’ performance last year, will begin to improve in earnest this year. Furthermore, production facilities for tire cords, airbag cushions, spun bonds, epoxy resin, and other business sectors are scheduled to be newly installed and expanded this year. Once they go into operation, they are expected to help the company reach new heights in sales and earnings.
KOLON Glotech (CEO Choi Suk-sun) will showcase Geonic – a high-molecular additive printing technique – at CES 2018, which is the world’s largest home appliance and IT product fair scheduled to take place over four days from the 9th in Las Vegas.
Geonic was applied to the logo on the head support of the seats, the reverse side of the seats, windscreen cover, interior materials, and IT displays of Snap – the self-driving concept vehicle released by Rinspeed, a Swiss automotive design company.
Geonic is an additive printing technique exclusively developed by KOLON Glotech. It is used to apply high-molecular materials onto leather and fabric and create designs and colors that cannot be realized by the existing techniques of painting, laminating, and quilting. Geonic encompasses diverse sectors, including applied chemistry to control polymers with convergence technology for specific purposes, high-resolution printing equipment to realize elaborate designs with accuracy, and processes to add a three-dimensional effect.
Natural leather and synthetic leather for upholstery use are treated to prevent possible damage on the surface and thus are difficult to add designs to. However, Geonic succeeded in pushing the boundaries and freely applying patterns to leather. Geonic was applied to the seat upholstery of Chrysler’s Superman edition model and won the Red Dot: Best of the Best in the 2013 Red Dot Design Award. We are currently working with major vehicle manufacturers in Korea and beyond and plan to cooperate with more industries such as construction and electronics.
Ryu Gwang-taek, head of the Research and Planning Team at KOLON Glotech, said, “Inspired by the inlay technique for Goryeo celadon, which engraves patterns on celadon and cover the patterns with gold or silver, patterns were etched on natural leather and high-molecular materials were applied using the additive printing technique of Geonic to create designs that were originally difficult to render on leather.”
Rinspeed is a Swiss automotive design company that has worked with a variety of vehicle manufacturers over the past two decades since it first showcased its design through Volkswagen’s Golf in the Geneva International Motor Show in 1979. It has continued to unveil uniquely designed future concept cars, such as ETOS in 2016, OASIS in 2017, and Snap in 2018, through collaboration with companies gearing up to jump into the automotive industry, such as Hamann, Siemens, BlackBerry, and Sheller. At this year’s CES, Rinspeed will reveal Snap, a self-driving micro bus, at Hamann’s showcase to take place at the Hard Rock Hotel in Las Vegas.
In his New Year’s address, CEO and Chairperson Lee Woong-yeul emphasized the need to focus on reaping visible outcomes and seizing new opportunities based on our past footsteps and declared “Catch 2018” as this year’s management policy. Chairperson Lee said, “I have tried to pay attention to the voices of our employees on the business frontier and have ardently hoped that our footsteps would lead to the desired results. Let’s ensure not to miss new opportunities created as a result of our efforts to keep abreast with the shifting industrial paradigm and catch the two hares of growth and stability at once in 2018.”
Many projects that have been newly launched by KOLON Group are expected to generate visible outcomes throughout 2018. Last year, we successfully released Invossa, a gene therapy for degenerative arthritis, and expect to see a continued expansion in the market. We have also focused our resources on advancing into global markets by building production plants overseas and reinforcing the presence of our fashion business in China. We plan to take preemptive steps in high-value-added new material businesses such as colorless polyimide film.
The KOLON Future Technology Research Park, scheduled to open in the first half of 2018 in Magok, Seoul, will serve as a hub of knowledge convergence that creates synergy among the sales, research, and supportive functions of KOLON Group and help us make new leaps forward.
Chairperson Lee stressed the role of communication and execution in combination with a mindset for innovation in seizing new opportunities in a timely manner. He highlighted the importance of breaking free from habitual routines through constructive destruction, saying, “We will be able to bring forth drastic changes if we strive to view every issue from a different perspective and utilize what we have in an innovative fashion.”
He also mentioned that “interaction with dedication”, regardless of position and job task, is essential to accurately identify the needs of customers and the latest developments in the market and achieve synergy, while a thorough focus on the execution of findings from such interaction is the only path towards success.
We distributed a badge of management policy to all our employees this year as we have over the past five years. This year’s badge was designed after a cat, deriving from “Catch 2018”. The badge was inspired by the cat’s ability to make higher leaps into the air (higher performance) and its flexible, solid landings (flexible responses to challenges).
It has been six years since KOLON employees first began to wear the badge of management policy in 2013. In the first year, the “Success Puzzle” badge was distributed to remind ourselves of the fact that no puzzle can be complete if any piece, however small, is missing. In 2014, the “Addition-Multiplication-Division” badge was designed to encourage employees to add their thoughts, multiply their passion, and divide difficulties to reach their goals. In 2015, the “Timer 2015” badge was distributed to emphasize the need for decisive and timely execution. In 2016, the “Connecture 2016” badge was designed to highlight our endeavor to connect with and shape a better future. Finally, in 2017, the “Hurdling 2017” badge was worn to reinforce our will to join forces and overcome crises together.
Chairman Lee Woong-yeul of Kolon Group was presented with the “Mecenat Person of the Year Award” on the 28th at the 2017 Mecenat Awards in recognition of his contributions to community development and cultural activities for over two decades through a wide range of culture and art programs and infrastructure support.
Now in its 18th year, the Mecenat Awards is presented by the Korea Mecenat Association to companies and individuals who have made great contributions to the development of culture and the arts and the Korean people’s cultural heritage and experience. The “Mecenat Person of the Year Award” is bestowed on an individual who has made a significant contribution to the promotion of culture and the arts.
Chairman Lee, who has always stressed the social importance of culture and the arts and need for expanding their access to everyone, began providing a wide range of free culture and art programs to members of the local community since 1998; he has also provided exhibition space free of charge to young and innovative artist as well as artists returning to their craft after a hiatus and struggling to find a venue.
The “Kolon Fountains Culture Performance”, a program personally devised and implemented by Chairman Lee first in 1998, has been held every Saturday evening from June to September for the past decade in front of the Kolon Headquarters Complex in Gwacheon to provide cultural and artistic experiences to the community, ranging from classical performances such as concerts, ballets and traditional Korean music to popular arts such as jazz performances, musicals and puppet shows. In 2011, Kolon opened “Space K”, a combined cultural and art space in the lobby of the company’s headquarters building, which holds year-round art exhibitions open to all members of the community as well as hands-on experience programs linked to the exhibition to raise popular awareness of modern art. A total of 124 art exhibitions have been held to date, many of which have featured leading international artists whose works are often difficult to encounter in exhibition spaces in the metropolitan region outside of Seoul.
Chairman Lee has also invested 15 billion KRW to build the “Kolon Outdoor Music Pavilion” in 2000 in Daegu’s Duryu Park and donated the facility to the city, as part of a wide range of initiatives to support and fund infrastructure for culture and the arts. The company is currently preparing to open “SpaceK Magok”, a cultural space located in the newly-developing Magok district of Gangseo-gu, Seoul, by 2019.
You don’t have to go to an observatory anymore to gaze upon the limitless expanse of the universe, glittering stars and the shimmering light of the Milky Way. Now, these stellar sights can be experience at an expressway rest stop thanks to the Starlight Garden “OOOZOOO” located in the Deokpyeong Eco-Service Area located on the Yeongdong Expressway.
The Deokpyeong Eco-Service Area, operated by Nature Bridge Co., a part of Kolon Group, opened the Starlight Garden “OOOZOOO” on the 26th, a theme park offering gleaming lights every night alongside a rich range of special content. Korea’s first light-themed park located in a highway service area for all visitors and families to enjoy has recreated the service stop into an entertainment and culture complex.
Starlight Garden “OOOZOOO”, which utilizes an unused section of the Yeongdong Expresses as well as approximately 14,000 pyeong (46,000㎡) of surrounding land, brings light into a space that has remained dark to create an unforgettable and rich cultural experience. The theme park consists of ten content-zones that recreate space using light. “OOOZOOO Station”, located in the entrance to the park, offers media art presenting a symphony of vibrant light, and the “Flower Garden” filled with lightbulbs creates a field of bright light flowers that twinkle like stars in the breeze. The 101-meter “Tunnel Galaxy”, Korea’s longest, allows visitors to feel like they are taking a stroll through a galaxy filled with stars; the light-and-sound show “Starlight Orchestra” brings light and music together for an orchestral performance. Visitors can also take in the “OOOZOOO Playground” that lights up at every step, photo zones throughout the area, and artwork produced through collaborations with some of Korea’s top media artists including col.l.age+ and Everyware.
Director of Business Development Yim Seung-wu said, “The Deokpyeong Eco-Service Area has constantly reinvented itself to create a rest area that people want to visit. With over 12 million visitors per year and the highest revenues among all of Korea’s highest rest stops, the Deokpyeong Eco-Service Area provides much more than a rest stop along a highway trip; it is a place for creating lasting memories with your family and friends.”
The rest stop has continued to create new sources of fun and entertainment for guests, including food, shopping, pet facilities, and variety of outdoor spaces. The Deokpyeong Eco-Service Area was Korea’s first rest area to open a fashion shopping mall, and a garden features love benches, artwork-infused trash receptacles and a wide range of photo zones. “Run Koko” is Korea’s first pet training-themed pet experience area and dog park that has become a must stop for pet aficionados throughout Korea. The recently-trademarked “Deokpyeong Beef and Rice Stew”, the rest stop’s most popular food offering, has ranked 1st in Korea’s highway rest area food sales four years in a row, with 582,830 servings in 2016 alone according to Korea Expressway Corporation data.
“Labor and management are like the two legs of a person. Both need to step in harmony to propel the company forward. Kolon Industries’ Gumi plant will provide a model for success for labor-management partnership!”
Chairman Lee Woong-yeul of Kolon Group visited the Gumi plant of Kolon Industries on the 24th to participate in the “Driving Success for Our Happy Factory” event to recognize the efforts of plant employees. The event marks the chairman’s second visit to the factory following an earlier visit in April.
The event, attended by approximately 350 employees not on current duty or on leave, was an occasion for reaffirming the role of every employee and the plant’s complete commitment to the declaration of “harmonious coexistence” made early last year that established a strong partnership of cooperation between the plant’s labor and management. Chairman Lee personally took part in a variety of events including putting together a “puzzle for success” and a ceremony for the presentation of a mutual success fund to partner companies. The chairman also visited the office of the plant’s labor union to offer his encouragement to union members who worked hard to build and secure the plant’s labor-management partnership.
Chairman Lee also personally took part in a shift for painting the plant’s facilities, working together with line employees including Kolon Industries union head Kim Yeong-sang as part of a program underway in seven Kolon Industries facilities including the Gumi plant designed to drive success in the workplace.
After the session, Chairman Lee said he was reminded of “painting in this facility for the first time nine years ago,” adding that “the hope at the time was to heal our rifts and forge ahead as one united body, and I feel that the Gumi plant has become one of our brightest stars in labor-management harmony thanks to the joint efforts of all of our staff and employees.”
Chairman Lee’s visit to the plant is especially poignant considering the role he played in overcoming the labor-management dispute at the Gumi plant. Long engaged in severe conflict, the factory’s labor union and management agreed in a dramatic shift in 2007, the year marking the 50th year of the company’s founding, to declare a permanent non-strike policy; a year later, the “Happy Plant Project” proposed by Chairman Lee further bridged the gap between labor and management. Declaring his personal oversight of the Happy Plant Project at the time, Chairman Lee worked with employees in painting sessions and took part in other sincere efforts to bring together the plant’s workers and management.
Following the initiation of the “Happy Plant Project”, Kolon’s Gumi factory has become a model for a dispute-free workplace, and was awarded the 2014 Silver Tower Order of Industrial Service Merit and 2016 Prime Minister Award in recognition of the factory’s labor-management partnership. These efforts have also led to the opening of the Happy Theme Park inside the plant, featuring a café, movie theater and library, which has hosted free annual performances for employees and their families and other programs to promote successful labor-management cooperation. The plant issued a declaration of a “Labor Management Harmony” early last year as a testament to the spirit of “labor and management in one body,” and hosted the “ceremony for labor-management-government social responsibility commitment agreement” in August in cooperation with the Ministry of Employment and Labor.
Kolon Plastics (CEO Hee-gu Jang) took part in FAKUMA 2017, the International Trade Fair for Plastics Processing, held from the 17th to 21st in Friedrichshafen, Germany. The company showcase a wide range of leading products including a world-leading eco-friendly POM* as well as advanced materials for lightweight automobile components and futuristic composite applications.
The center of attention at the Kolon Plastic’s booth was a world-leading eco-friendly POM (polyoxymethylene). The nature-friendly POM unveiled by Kolon Plastics has a volatile organic compound (VOC) content of 0.5ppm, over 25% less than existing products that provides a highly environmentally-friendly LO (low odor) option for both the manufacturing process as well as the final product. This year’s show featured a separate “LO POM Zone” that provided an opportunity to compare the new material with existing products side by side.
Kolon Plastics also displayed key automobile structural components using CFRP composites (brand name: KompGTe) widely hailed as an important next-generation high-tech material as well as 3D printer-related products.
POMs are one of the key business areas of Kolon Plastics; the completion of a joint factory with BASF, the world’s largest chemical company, in the second half of next year will enable the company to produce a world-leading 150,000 tons of POM per year, further boosting the company’s manufacturing competitiveness.
With engineering plastics expected to find increasingly greater application in charging infrastructure and electronical components for the fast-growing autonomous vehicle market, Kolon Plastics plans to expand its products for electric vehicles and self-driving cars such as connectors, protector housings, charging systems, bobbins, relays, alternators and other key components by applying the company’s core materials such as PBT (polybutylene terephthalate) as well as PA (polyamide) and POM.
CEO Jang, visiting the exhibition, said that the company will “expand the sale of Kolon’s high-quality and price-competitive POMs throughout the global market in the second half of next year,” adding that “Kolon is combining efforts to strengthen core competitive capabilities with a strong drive for developing new future growth engines such as composites and 3D printing.”
FAKUMA is one of Europe’s top three plastics trade shows, with the previous 2015 event featuring 1,783 companies from 38 countries and attracting over 46,000 attendees from 120 countries. Kolon Plastics has been taking part in the exhibition since 2012, wowing visitors to the fair with the company’s specialized engineering plastics for lightweight automobile components and advanced high-tech composites.
Kolon Industries Inc. (CEO Park Dong Moon) will invest approximately 30 billion KRW to expand its production facilities for special epoxy resins for use in manufacturing electronics and phenol resins for hardeners, in response to the growth of the automobile electronics and communication server markets. The new production lines will be installed in Kolon’s Gimcheon No. 2 plant by September 2018.
Special-purpose epoxy resins for electronics components and phenol resin hardeners are advanced thermosetting plastics indispensable in the manufacturing process for electronics circuit boards.
These two types of resins are used as adhesives to bind together glass fiber and copper plates for manufacturing cooper clad laminates (CCLs). Successive layers of CCLs create the printed circuit board (PCB) found in all kinds of electronics. The special electronics epoxy resin and phenol resin hardener used in this process imbue the thin PCB with high thermal resistance as well as low thermal conductivity that reduces the electrical resistance between each circuit, enhancing the stability of information stored in the circuit.
The latest expansion will boost Kolon Industries’ specialized electronics epoxy resin production capacity from 25,000 tons to 37,000 tons, and phenol resin hardener production from 7,000 tons to 12,000 tons. By expanding its production capacity by nearly half for these two key products, the company expects to increase annual revenues by 60 million KRW.
Kolon Industries will carefully incorporate today’s customer needs to the new expansion to continuously boost product quality for application in increasingly lighter, thinner, shorter and more compact circuit boards for use in automobile electronic systems and communications server equipment. In recently years, the market for specialized epoxy resins for electronics manufacturing has been growing at a rate of 10 to 12% annually in Korea as well as China, Taiwan and Japan.
Kolon industries is the world’s only company with the technology to manufacture epoxy resins for electronics and phenol resin hardeners in the same production facility and produces its own intermediary materials for its advanced epoxies, providing the company with stable quality and high price competitiveness.
Kolon Industries Inc. (CEO Park Dong Moon) signed an MOU for a partnership that includes new product development with a Korean small and medium enterprise (SME) armed with leading high-end technology in the film industry.
On July 19, Kolon Industries and KFM Co., a Korean film specialist, signed a partnership agreement for mutual growth at Kolon’s Gimcheon No. 1 factory. The signing ceremony was attended by Senior Managing Director Hong Seong-ahn, head of business of Kolon’s 3rd Division, and CEO Hong Jung-gi of KFM Co.
The latest MOU zeros in on making on impact in the global market including China through joint R&D for the development of new PET-based materials and commercial rollout of R&D achievements. The two companies agreed to cooperate on developing advanced films, identifying and developing new applications for products, and engaging in regular technology exchange and product commercialization projects.
With the partnership, Kolon Industries will be able to leverage KFM’s technological capabilities and Chinese network, while KFM will be able to rely on a stable supply of high-quality base films from Kolon Industries and acquire technological know-how via joint new product development projects.
“The MOU is a prime example of a large company and an SME working together to share their technology and network, develop new markets and achieve mutual growth in the film industry,” said Senior Managing Director Hong, the head of Kolon Industries’ film division, adding that “both partners will be able to achieve marked growth by identifying new applications and developing new products.”
CEO Hong of KFM founded a company named Kern in Korea in 1998 and entered the Chinese market in 2004, posting steady growth in China’s film industry and eventually establishing KFM Co. in Korea in May of 2013 as part of the company’s global expansion of its film business. The company’s key products include silicone cured film, acrylic adhesive film and OCA film, and KFM is widely regarded as one of the industry’s strongest hidden champions armed with advanced base film processing and coating technologies that enable KFM to compete head-to-head in the Chinese market with leading Japanese firms such as Toray and Mitsubishi.
Kolon Industries has been a technology leader for over three decades producing a wide range of PET and nylon optical, food packaging, insulation and industrial films. The company recently developed the world’s first transparent polyimide film (trademark: CPI – Colorless Polyimide) and is preparing for commercial production of the new innovative film to take pre-emptive leadership in the display market.
Kolon Plastics Bolsters Competitiveness in Advanced Compounds
○ Gimcheon No. 2 Plant comes online on May 23, begins production of compounds and composite materials
○ New plant to boost annual production capacity by 40%, stabilizing operation following new facility installation late last year
Kolon Plastics (CEO Jang Hee-gu) held a ceremony to mark the completion of the Gimcheon No. 2 Plant in Gimcheon, Gyeongsangbuk-do on May 23, shifting into high gear the company’s production of advanced engineering plastics.
The event was attended by CEO of Kolon Plastics Jang Hee-gu and over 200 employees, as well as Mayor of Gimcheon Park Bo-saeng and Member of the National Assembly Lee Cheol-woo who were on hand to offer their congratulations on the opening of the new plant.
The Gimcheon No. 2 Plant is a 66,000㎡, 43 billion-won facility in the Gimcheon Industrial Complex with production facilities for engineering plastic compounds* and CFRPs, Kolon Plastics’ key products, as well as an R&D center. Construction of the new plant was completed late last year, followed by work to stabilize and optimize production parameters that was recently concluded.
The new factory features the latest high-tech production equipment capable of manufacturing specialized compound products with super heat resistance, high strength and high shock resistance; the introduction of a smart factory system has further boosted the quality competitiveness of the new plant. By combining previously separate production lines, the new facility will enable Kolon to increase production by 40% to 50,000 tons per year.
Kolon Plastics has also completed the installation of a semi-mass production facility for a *CFRP composite material (brand name: KompoGTe). The production line was constructed using Kolon Plastics’ proprietary technology that enabled a two-fold increase in efficiency over the existing process, and is capable of immediately applying a diverse range of customer demands into the manufacturing process.
In his commemoratory address, Kolon Plastics CEO Jang Hee-gu said that “the completion of the Gimcheon No. 2 Plant will fully bring online our production of top-quality compounds and advanced composite materials that will exceed even the high expectations of our customers and continue to drive our sustained growth.”
* Compounds: Advanced plastics made by adding certain additives into plastic bases to create a wide range of properties required by the client, increasingly in demand as automakers continue to develop lighter and more fuel-efficient cars. Kolon Plastics manufactures hundreds of different types of composites based on engineering plastics such as polyaramid (PA) and polyoxymethylene (POM).
* CFRP (carbon fiber reinforced plastic) is a lightweight structural composite plastic material that exhibits high strength and flexibility.
Kolon Plastics Unveils World-leading Eco-friendly POM
○ CFRP, other high-tech materials showcased at CHINAPLAS 2017 in Guangzhou, China
Kolon Plastics, Inc. (CEO Jang Hee-gu) unveiled an extensive range of products at CHINAPLAS 2017, held on May 16 in Guangzhou, China, including a cutting-edge eco-friendly polyoxymethylene (POM) and composite material applications that represent the key to tomorrow’s light-weight, fuel-efficient cars.
The star at Kolon Plastics’ booth was the company’s POM with world-leading quality and eco-friendly properties. Designed as a low odor (LO) material with a volatile organic compound (VOC) content of less than 0.5ppm, or 25% of existing products, the high-tech material ensures environmental friendliness both during the manufacturing process as well as for the finished product. A stand-alone “LO POM Zone” was created for the exhibition to allow direct side-by-side comparison with existing materials.
The materials were shaped in such a way to enable visitors to identify at a glance their application in automobile components, a core business of Kolon Plastics; the company also showcased major vehicle structural components using CFRP composites (brand name: KompoGTe), a next-generation high-tech material that has been gaining considerable interest in the industry, and 3D printer-related products.
Kolon Plastics introduced a new mascot named “Future Bear” to help members of the general public easily grasp the unfamiliar world of engineering plastics.
CEO Jang, who paid a personal visit to the exhibition, said, “Our POM business is driving the growth of Kolon Plastics through a series of key initiatives including a partnership with BASF, with composite materials and other future growth engines being carefully nurtured at the same time,” adding that “the completion of our joint POM plant with BASF in the second half of next year will kick-start our global sales expansion.”
A visitor to Kolon Plastics’ booth said that “being able to see a variety of products and their applications provided a valuable chance to examine the future of POM.”
CHINAPLAS is Asia’s largest and the world’s second-largest international plastics and rubber industry expo, held this year from May 16 to 19 in the China Import & Export Fair Complex located in Guangzhou, China. Over 3,300 companies from 40 countries will take part in the event, with over 140,000 visitors.
CFRP (carbon fiber reinforced plastic) is a lightweight structural composite plastic material that exhibits high strength and flexibility. Kolon Plastics has been marketing the high-strength composite material under the KompoGTe brand since early 2014.
“Invossa will Become a Global Icon of Innovation,” Says Chairman Lee Woong Yeul
- Kolon initiates hands-on management for “Invossa” production plant
○ Invossa, the world’s first cell-mediated gene therapy for osteoarthritis and culmination of 19-year commitment by Chairman Lee
○ Group chief visits Kolon Life Science’s Chungju factory to inspect the facility and offer encouragement to the staff as the plant gears up for commercial production
“Just as the smart phone changed the way of life for people around the world, ‘Invossa’ will become a global icon of innovation that will dramatically transform how we live our lives in today’s rapidly-aging society.”
Kolon Group Chairman Lee Woong Yeul took part in a hands-on management initiative for the Group’s provincial sites by visiting the Chungju plant of Kolon Life Science, the production center for Invossa, the world’s first cell-mediated gene therapy for degenerative osteoarthritis currently awaiting new pharmaceutical approval.
With the plant gearing up for the production of Invossa after a 19-year development project, employees organized an “Invossa Coming-of-Age” talk show event to celebrate the upcoming success of Invossa. Participants took turns sharing success stories and episodes of the development period and congratulated team members who devoted themselves to the new drug’s development; the event was attended by Chairman Lee to mark this momentous occasion.
The chairman personally took part in an activity for writing down the meaning of Invossa on a board, putting down “Invossa to me is ‘981103’.” Chairman Lee recalled, “The date I received the feasibility report for the Invossa project was November 3, 1998, and I remember agonizing over the report’s conclusion that the project’s probability of success was remote.”
However, Chairman Lee said, “Pulling back was out of the question even if the chance of success was 0.00001% when the question was the future of the Group, and the project was given the go-ahead,” adding that “the date of birth for Invossa, ‘981103’, became my numbers of success.”
“Let us work hard to ensure that our current initiative for expanding the Chungju plant’s annual production capacity from 10,000 does to 100,000 proceeds flawlessly, so that we can be ready to meet what will surely become the ‘Age of Invossa’,” said Chairman Lee.
Invossa is a new bio-drug that treats osteoarthritis with a simple injection of cells containing allogenic chondrocytes and cells containing growth factors that stimulate cell division into the articular cavity of the patient’s knee. Application for new pharmaceutical approval was submitted to the Ministry of Food and Drug Safety last July in Korea, and a 500 billion KRW export contract was signed last November with Mitsubishi Tanabe Pharma, setting a new record for a single-nation export deal. Phase 2 clinical trials have been successfully completed in the United States, with phase 3 trials set to begin soon.
In 1999, during the nascent phase of Korea’s biotechnology industry, Chairman Lee founded Tissugene Inc. not in Korea but in the United States. The new company was part of a strategy to target the global market from the initial stages of development. Doubt was voiced within and outside the company at the time, but Chairman Lee stood firm in his conviction that the bio industry was to become an important growth driver in the future. Tissugene Asia (currently Kolon Life Science) was founded in 2000, with related patents acquired starting in 2001 and simultaneous clinical trials initiated in Korea and the U.S. in a powerful drive for the development of Invossa.
The process of development that spanned 19 years in what was considered barren grounds for biotechnology was a rocky road. Gene therapy requires long-term observation of subjects involved in clinical trials, necessitating a longer development period compared to other general chemical drugs. As Korea’s first genetic therapy drug, the Invossa project faced many difficulties requiring constant trial-and-error, from the early stages to eventual approval, not to mention having to overcome a series of regulatory barriers.
“Stepping into the unknown realm of biotechnology was both frightening and difficult,” said Chairman Lee, emphasizing that “we are where we are today because we discovered opportunities in hardships and convinced ourselves of our eventual success.”
Kolon Life Science estimates that over 400 million people around the world are suffering from osteoarthritis, with the number expected to steadily increase due to increasing lifespans and the prevalence of obesity. Currently, people affected by degenerative osteoarthritis who have resistance to painkillers or injections that reduce pain and inflammation have no other alternative than turning to surgery, and Invossa is expected to considerably alleviate the suffering of such patients.
Departing after his visit to the Chungju plant, Chairman Lee shook hands with each employee and said, “It would not be an exaggeration to say that I have devoted a full third of my life to this effort, and I am fully committed to the success of Invossa and the future of Kolon,” adding that “I hope Invossa can be released in the market according to plan and schedule, and provide much-needed relief to people suffering from osteoarthritis.”
Chairman Lee Woong Yeul Declares “Huddling & Hurdling 2017” as Management Motto
- “We must gather our wisdom and strength together to ensure that we survive together” -
▷New Group management motto “Huddling & Hurdling 2017” chosen to reflect commitment of all employees to “huddle” together to “hurdle” barriers and crises
▷Overcoming challenges through “collective thinking for greater benefit (集思廣益) emphasized for 2017, a milestone year for preparing for “a new age of Kolon’s leap forward”
Kolon Group (Chairman Lee Woong Yeul) held a “Group-wide New Year Kickoff Meeting” on January 2 in the main auditorium of Kolon Tower, located in Gwacheon, attended by the board of directors and senior managers.
In his New Year’s address, Chairman Lee emphasized the need to pool each Kolon employee’s wisdom and strength to ensure collective survival and break through barriers, selecting “Huddling & Hurdling 2017” as this year’s management motto. Chairman Lee said, “Although most experts are offering grim outlooks for both the domestic and international economies, we must rely on our trust for one another to huddle together and hurdle over the challenges that face us.’
Chairman Lee announced that 2018 will mark the start of a “new age of Kolon’s leap forward” as the Group’s key projects begin to bear fruit. Kolon Group has continuously launched new businesses including next generation materials by Kolon Industries and new drugs by Kolon Life Science while expanding investments into key overseas outposts such as Vietnam and Mexico. These projects and investment initiatives will be completed throughout 2017, ready to begin producing results in 2018. Chairman Lee said that “2017 will be an extremely important year for preparing for this new phase of growth, and each moment in each day will present key opportunities,” offering the philosophy defined by the proverb “collective thinking for greater benefit” as the solution for overcoming challenges and threats.
Continuing a five-year tradition, all employees were given a badge containing the year’s management motto. This year’s badge bore the image of Antarctic emperor penguins huddling together to share warmth and withstand the bitter polar chill. The depiction symbolizes all employees huddling together like the hardy Antarctic birds to share each member’s wisdom and strength to overcome the challenges of today’s difficult economic climate.
Chairman Lee exhorted all employees to speed up the adoption of Kolon’s own unique corporate culture and accelerate process innovation. He called for all employees to embrace as part of Kolon’s corporate culture practices such as “Open it”, a forum for openly introducing problems and searching for solutions, and the “Success Puzzle Session”, where each Wednesday employees come together to share success stories. Chairman Lee also emphasized the grafting of “process innovations” adopted in 2015 to boost efficiency, create new mind-sets and optimize systems throughout all business processes. In addition, more opportunities will be created for the free and open exchange of ideas in small groups that cross and include all tasks, position, teams and companies throughout the Group to promote greater Cross-functional Communication (CFC).
Kolon introduced the management motto badges for all employees in 2013. The first badge depicted the “Success Puzzle”, showing that a puzzle cannot be completed if even one piece of the whole is missing; 2014’s “Add, Multiply and Divide” badge called for adding every Kolon family member’s heart, multiplying them by their passion and dividing all burdens to create limitless energy for success. In 2015, the “Timer 2015” badge emphasized the need to be aware of each passing second to stay alert and ready, and last year’s “Connecture 2016” badge highlighted the need to concentrate on discovering future growth engines before the doors of change close, in order to build a successful connection between the present and the future. Each badge has served as a reminder of the year’s core management motto, allowing each employee to remember and carry out these important tenets.
※ Huddling, the great camaraderie of emperor penguins
Huddling is the behavior of emperor penguins, the world’s largest species of these polar birds, to stand close together in cooperation to withstand the blizzards and frigid cold of Antarctica, their habitat. Unlike other animals that leave the frozen continent in the winter, emperor penguins venture deeper into the mainland during the cold winters to evade predators such as orcas and sea lions and find mating and breeding grounds. Emperor penguins are able to survive in temperature of 50~60℃ below zero thanks to the power of huddling that enables each member of the community to look out for and help one another. Penguins stand against each other to share their warmth, with members inside the group replacing others on the periphery whose body temperatures have fallen. The success of the huddle lies in the self-sacrifice of all members bearing the brunt of the cold with their own bodies and trust in their comrades to take their place and allow them a respite in the warmer center. The huddle is a great collective partnership that ensures the survival of the whole group.
※ “Collective thinking for greater benefit” (集思廣益)
The proverb that states the benefit of many heads to create synergy is based on the sayings of the great statesman and tactician Zhuge Liang, who stated after becoming the prime minister of Shu Han during the Three Kingdoms period that “people who have devoted themselves to public office must strive to gather together the opinions of many to further expand the benefits to the country.”
Southeast Asia’s first tire cord factory built in Vietnam
○ New 260 billion KRW factory in Vietnam to produce 36,000 tons per year
○ Early investment in Southeast Asia to serve as springboard for global expansion of automobile material business
Kolon Industries Inc. (CEO Park Dong Moon) has established a tire cord production base in Vietnam, starting a global market expansion for the company’s automobile material business.
Kolon Industries announced on November 24 that the company will invest 260 billion KRW in Binh Duong, Vietnam, to build a new polyester (PET) tire cord factory with an annual production capacity of 36,000 tons.
President and CEO Park Dong Moon of Kolon Industries met with Secretary of Provincial Party Committee Tran Van Nam and Chairman of the Bihn Duong Province People’s Committee Tran Thanh Liem on the 23rd at the People’s Committee headquarters to sign an MOU on the company’s tire cord production faculty investment project, and was promised the earnest support and partnership of the government of Vietnam. Chairman Lee Woong Yeul of Kolon Group took part in the day’s ceremony in order to further give weight to the investment deal.
Located in the Bau Bang Expanded Industrial Park in Bihn Duong Province, Kolon’s new tire cord plant in Vietnam will feature an integrated production system encompassing the entire manufacturing process from yarn production to weaving, heat treatment and finished-product shipment, with full production slated to begin in the second half of 2018. Cutting-edge production facilities throughout the entire manufacturing line combined with over five decades of production know-how accumulated by Kolon Industries will create a plant with world-leading price and quality competitiveness.
By adding the new Vietnam plant’s production to its existing capacity of 77,000 tons from factories in Korea and China, Kolon will boost its worldwide production to 113,000 tons per year, further cementing the company’s leading position in the global market. The Vietnam plant will serve as a production outpost armed with leading technology and cost competitiveness, enabling the company to develop the competitive capabilities needed to nimbly deal with future changes in the market and the pressure from encroaching second movers.
Senior Managing Director Choi Young-moo, who heads Kolon Industries’ tire cord business, said that “the decision to invest in a tire cord plant in Vietnam is part of a strategy to expand Kolon’s global automobile material business with Southeast Asia serving as a springboard. Whereas our Nanjing plant was an investment for taking early leadership of the Chinese market that has grown rapidly in the past decade, the new Vietnam plant is aimed at securing the core capabilities for our leadership in the worldwide market.”
Since launching its PET tire cord business in 1979 in the Gumi production facility, Kolon Industries Inc. has honed its competitiveness through partnerships with major global tire companies including Bridgestone, Goodyear and Michelin. In 2004, the company opened a new factory in Nanjing, China as its forward base in the Chinese market.
In early September, Kolon Industries acquired an airbag sewing plant in Ho Chi Min City as part of an investment expansion for driving the company’s growth in the global market for automobile materials.
○ MEA technology acquired from Gore Inc. as Kolon gears up for mass production
○ Kolon Industries outlines plans to leverage greater MEA production technology to enter transportation, building and power generation markets
On November 7, Kolon Industries Inc. (CEO Park Dong Moon) announced the acquisition of MEA (membrane electrode assembly) technology, a key component of hydrogen fuel cells, from W. L. Gore and Associates, Inc., an American firm, setting into motion plans for developing MEA mass-production technology for global market leadership.
MEA technology is a core technology for polymer electrolyte membrane fuel cells (PEMFC), a type of hydrogen fuel cell used in electric vehicles that generate electricity from hydrogen fuel cells.
The acquisition of Gore’s world-leading MEA technology has imbued new technological competitiveness to Kolon Industries in the global market for fuel cells, an increasingly promising and eco-friendly future energy.
Integrating the company’s commercial production technologies with Gore Inc.’s MEA technology drawing from the American firms’ unique membrane technology is expected to enable Kolon to accelerate the rollout of highly competitive hydrogen fuel cell MEAs.
Only a handful of global chemical companies, including Gore, produce MEAs. In Korea, Hyundai Motors and the Korean Institute of Energy Research hold related technologies. The development of cost-effective MEA mass production technology is expected to bring global market leadership.
Managing Director Shin Yong-cheol of Kolon Industries Inc., who heads the company’s MEA business, said, “Kolon plans to expand its business scope into fuel cells for transportation, buildings and power generation with the newly-acquired MEA production technology,” adding that the company plans to “prepare for taking early leadership of the hydrogen fuel cell MEA market as well as for future market expansion.”
Kolon Industries has been researching hydrogen fuel cells since 2006 as a key future growth engine. In 2013, the company joined domestic automakers in a joint R&D project to successfully develop the world’s first water management system for hydrogen fuel cells, a key component of hydrogen-powered cars. Kolon’s efforts to acquire the necessary technologies to boost its MEA business capabilities has led to deals with both foreign and domestic companies, including a recent acquisition of MEA-related R&D facilities and key patents from Samsung SDI.
Kolon Life Science (CEO Lee Woo-sok) has signed an agreement to export the technology for Invossa, the world's first cell and gene therapy drug for osteoarthritis, to Japan. The deal comes amidst the final review process for commercial production by the Korean Ministry of Drug and Food Safety following the third phase of the drug's clinical trials, a testament to the high regard for the safety and efficacy of Invossa in the global market.
Kolon Life Science announced on the 1st that a technology export deal has been signed with Mitsubishi Tanabe Pharma (CEO Masayuki Mitsuka) for Invossa. The drug is a new bio pharmaceutical that has been shown during clinical trials in Korea to provide more than a year of pain relief and mobility improvement to patients suffering from osteoarthritis with just one administration and without surgery.
Kolon Life Science will receive an initial payment of 27.3 billion KRW (2.5 billion yen) followed by milestone payments totaling 471.6 billion KRW (43.2 billion yen) after Invossa completes clinical development in Japan, receives approval and enters commercial production. The 500 billion KRW (45.7 billion yen) technology export contract is the largest single-country export contract for a Korean pharmaceutical or biotechnology company. Kolon will also receive a double-digit-percentage royalty once the drug is released into the market. Mitsubishi Tanabe will hold exclusive development and sales rights of Invossa in the Japanese market and conduct local clinical trials and apply for approval, with Kolon Life Science manufacturing and supplying the drug.
CEO Lee said, "The export deal represents an acknowledgement in the global market of the value of Invossa, and the successful entry into the Japanese market, known for very strict quality control, will further boost our efforts for technology export into other overseas markets." Japan accounts for 7-9% of worldwide pharmaceutical sales.
Mitsubishi Tanabe Pharma is one of the world top 50 pharmaceutical companies in terms of sales, and the top seller of drugs for treating rheumatoid arthritis in Japan. The company plans to use Invossa to enter the market for drugs treating osteoarthritis. The number of patients suffering from the disorder among Japanese adults over the age of 40 is estimated to be 25.3 million, and the lifestyle habits and aging population of Japan is expected to increase this number.
Kolon Group has invested in the development of Invossa for the past 17 years. In Korea, Kolon Life Science completed the third phase of clinical trials and received the first approval by the government for a genetic therapy drug in July of this year. In the United States, Tissugene Inc. completed the second phase of clinical trials and has received approval for starting the third phase, and global clinical trials are underway with support from the Ministry of Science, ICT and Future Planning and the Ministry of Health and Welfare. Tissugene aims to receive approval for Invossa as a disease-modifying osteoarthritis drug (DMOAD) from the Food and Drug Administration after completing the third phase of clinical trials.
Kolon Plastics will expand its presence in the market for high value-added compounds, a type of material that is being widely used to reduce weight for modern automobiles.
Plastic compounds are high-performance materials that use a plastic base product mixed with certain additives to produce the variety of properties required by customers, and are being increasingly used as a lightweight material for automobiles. Kolon Plastics supplies hundreds of types of compounds using polyamide (PA) and polyoxymethylene (POM) engineering plastics.
Kolon Plastics (CEO Jang Hee-gu) recently completed the construction of its No. 2 Gimcheon plant in the Gimcheon Industrial Park, a 66,000㎡ facility for manufacturing high value-added compounds, the company announced on the 31st.
The new plant uses advanced production facilities to manufacture super heat-resisting, high-strength and high shock-resistant compounds that delivers higher quality for the global market. Production capacity was also boosted from 35,000 tons to 50,000 tons.
Placing the company's compound production, which had been split between the Gimcheon No. 1 plant and the Sangju factory, in a single site was allowed Kolon Plastics to introduce a smart factory system and increase production by 40%.
The new Gimcheon No. 2 plant uses smart process operation and control equipment to increase production competitiveness. The entire manufacturing process, from product planning to design, production and sales and distribution are optimized using ICT solutions developed in-house by Kolon. A supervisory control and data acquisition (SCADA) system allows the company to monitor the entire production process and convert the accumulated information as big data, which can be used for further process optimization and improvement.
The Gimcheon No. 2 plant also features an auto feeder system that links with the main production planning system to automatically supply raw materials based on the latest production information. An auto dosing system automatically measures and mixes all materials and compound additives for a precise composition. Big data is used during the drying process to automatically control the ideal temperature and humidity level for each product, allowing the company to supply products of the highest quality to customers.
CEO Jang said, "the new Gimcheon No. 2 plant was able to install a smart factory system despite naysayers who claimed it would be impossible to automate a multiple-product, small-batch production plant. Kolon Plastics' production know-how combined with high-tech production facilities has created a world-class production plant," and added that "preemptive investment in advanced plastics such as compounds and composite materials will drive our company's sustained growth."
Kolon Plastics is an engineering plastics specialist that recently signed an agreement to establish a joint venture for POM production with BASF, the German chemical giant, in March. The joint venture, Kolon BASF InnoPOM, is currently being built as a 70,000 POM production line within Kolon's Gimcheon No. 1 plant.
Kolon Plastics also announced its earnings forecast for the third quarter. Operating profits rose 16.8% compared to the same period last year to reach five billion KRW, with quarterly net profits increasing to 5.4 billion KRW, an 100.8% increase. Sales decreased by 4.7% year-on-year to 56.1 billion KRW. In the year to date, operating profits and net profits rose 62.4% and 135.6%, respective, to reach 17.1 billion KRW and 14.4 billion KRW, the highest in the company's history. Revenues fell 3.6% over the same period last year to 178.7 billion KRW.
Kolon has joined forces with the Georgia Institute of Technology in an open innovation project that will provide cutting-edge technologies and new inroads in to the North American market, the company announced on the 27th.
Kolon Industries has signed an agreement with Georgia Tech, located in Atlanta, GA, to open the "Kolon Center for Lifestyle Innovation (KCLI)", aimed at securing new technologies for the upcoming hyper-connected society and explore new growth drivers for the future.
The opening ceremony held at the university was attended by Chairman Lee Woong-ryeol of Kolon Group, CEO Park Dong-moon of Kolon Industries, Deputy Director Park Jong-min of the Kolon Industries Technology Center, President G.P. "Bud" Peterson of the Georgia Institute of Technology, Dean of the College of Engineering Gary May, Chair of Material Science and Engineering Naresh Thadhani, and Professor Sundaresan Jayaraman of the School of Material Science and Engineering and the Scheller College of Business, who will service as the Director of KCLI.
KCLI is the first R&D partnership between Kolon and a foreign university, through which the company will go beyond simple industry-academia cooperation to create real business innovation based on open innovation. KCLI will launch projects to enhance the quality and technology level of Kolon Industries' current core businesses such as automobiles, next-generation displays and chemical materials, as well as develop new future technologies such as the IoT, wearables and convergence materials.
Chairman Lee stated that "KCLI represents Kolon's first global open innovation platform that will transcend all boundaries and industries to create open collaboration," adding that "the institute is expected to serve as a key R&D outpost for the North American market that will develop innovative technologies and future growth engines."
CEO Park said, "Kolon Industries is driving new initiatives to secure next-generation technologies and build overseas production centers that will spearhead our future expansion," and said that "this important momentum will be further boosted with top talent that will carry out world-class R&D for expanding our presence in the North American market."
Kolon Industries has recently established production facilities for airbags, tire cords and other automobile components in Vietnam and Mexico, and increased investment in the CPI® colorless polyimide, an important material for next-generation displays, and spunbond, a high value-added fiber-based product.
Kolon Industries and Georgia Tech will jointly invest $3.5 million over five years for the operation of KCLI. President Bud Peterson stated that he is "extremely pleased to witness the special relationship between Georgia Tech and Kolon blooming into a real partnership," and added that "the university also stands strongly behind the project, especially since it is a rare matching-fund initiative."
Georgia Tech is one of the top three engineering universities in the United States with specialties in computers, macromolecule materials, aerospace and mechanics. Espousing practical engineering education, the university holds considerable know-how in commercializing technology and serves as a base for numerous world-leading companies for technology development through a number of partnership projects.
Kolon and Georgia Tech have long maintained a close relationship. The university has conducted joint research as well as contract projects for Kolon Industries and Kolon Glotech since 2008. Professor Jayaraman, who will head KCLI, is a world-renown scholar in wearable health care with a background in textile engineering and computing, and has served as the Kolon Professor of the Scheller College of Business and the School of Materials Science and Engineering since 2010.
○ Spunbond line expanded as part of effort to enter exclusive car carpet backing market
○ High value-added productions including drainer filter for civil engineering, heavy equipment engine fuel filter to deliver 200 billion in spunbond sales by 2020
Spunbond fiber, which is a common material found in wall paper backing, filters in air purifiers and packaging materials, is being increasingly used as a new material in the industrial and automobile industries to become a high value-added product.
Kolon Industries (CEO Park Dong-moon) will expand its spunbond production line with a 40 billion KRW investment. The new line, to be set up in the company Gumi production plant, will begin construction in October with completion planned for the fourth quarter of 2017. Once the new line is complete, Kolon Industries will be able to reach annual spunbond sales of over 100 billion KRW. With a production volume of 22,000 tons per year, the plant will become the world's largest single factory of its kind. The facility currently produce 16,000 tons per year.
The decision by Kolon Industries to expand its spunbond production stems from the company's plans for applying the material to "automobile carpet headliner backing*". Headliners and carpet backing must precisely adhere to the curvature of the car underbody while maintaining durability. The intense level of technology required has allowed only a handful of global firms to dominate the market. Kolon Industries began developing the technology for the past decade since 2007, and the project was selected as one of the Ministry of Trade, Industry and Energy's national development projects in May of 2015.
*Automobile carpet backing: fabric carpet that is installed directly on the metal frame attached to the vehicle body. Such carpeting is an interior feature that protects the car's underbody while providing noise and dust protection. The carpet is modeled to follow the curvature of the car's body, and spunbond material is used in this process to maintain stable shape, hold and durability.
Executive Director Choi Yeong-baek, who heads the spunbond business of Kolon Industries, said that "the new expansion will take the scale and profitability of Kolon Industries' spunbond business to the next level," adding that "our technological capacity, which we have refined for years, will allow Kolon Industries to rapidly exploit the automobile carpet backing market and take a leading market position."
Kolon Industries has been able to utilize the results of its spunbond R&D to develop and release a series of competitive, high value-added products. These include drain filters for construction and engine fuel filters for heavy equipment.
Drain filters are used to cover features used in civil engineering and construction projects for draining the water in the soil, ensuring the smooth passage of water while filtering particles in order to maximize drainage. The product was certified as a "New Excellent Product" by the Ministry of Knowledge Economy in 2012, and provides a domestically-produced alternative in a market that has heretofore relied on imports. With superior permeability and tensile strength compared to other materials and products, Kolon's filers have increased its market share to nearly 70% (domestic PET-type drain filters) in three years. The company has recently been eyeing the export market as part of efforts to boost its overseas revenues.
Engine fuel filters for heavy equipment were developed jointly with Cummins, a leading American manufacturer of large engines, with sales launched in 2013. Kolon Industries' polyester spunbond fuel filters have superior durability over traditional paper-based filters, and are deal for high-output engines with higher fuel and fluid pressure and quickly replacing traditional filters. Kolon Industries plans to grow its heavy equipment fuel filter business by 30% per year.
Kolon Industries' polyester spunbond is currently the top product in the domestic market and third in the Asian market, and expected to reach the number two spot in Asia following the new expansion. The company plans to further diversify the application of the material and expand its sales network to boost its spunbond sales to 200 billion KRW by 2020.
○ Takeover of Vietnamese airbag sewing plant, new Mexico airbag factory part of efforts to dominate global market, boost sales to 600 billion by 2020
○ Plans drawn up for 600,000-unit expansion for Nanjing's No. 1 plant, second Julong plant
Kolon Industries (CEO Park Dong-moon) is expanding its airbag business through a global investment drive that includes M&As and newly-constructed production plants. The company has acquired an airbag sewing factory in Vietnam and will build a new airbag factory in Mexico, expanding its overseas production bases from the current two to four. Kolon Industries has manufactured 36 million airbag units per year from its plant located in Gyeongsan, Gyeongsangbuk-do and two facilities in Nanjing and Julong, China.
Kolon Industries announced the takeover of the airbag sewing division of Hanyoung International located in Ho Chi Min City, Vietnam. Hanyoung International produces seven million airbag cushions per year. The takeover is valued at 17 billion KRW. By establishing a production base in Southeast Asia, Kolon Industries will be able to effectively expand its presence in the Asian market, whose demand for airbags has increased rapidly.
Executive Director Byeon Jae-myeong of the company's industrial materials division said, "The new plant in Vietnam will incorporate our world-leading quality control know-how while increasing cost competitiveness, and serve as a forward outpost for our business in not only the Asian market but the North American and European markets in the long term."
Kolon Industries will also bring its new airbag cushion plant constructed in Coahuila, Mexico, online in September. The Mexico plant is capable of producing three million units per year and will act as a bridgehead into the important North American car market.
Kolon Industries has also recently decided to invest in an expansion for OPW side curtain airbag production in its No. 1 plant in Nanjing, China. Once the project is complete, the Nanjing plant will be able to manufacture an additional 600,000 units from early 2017. The company's airbag plant in Julong, which is currently at maximum production capacity, is also being considered for an expansion. Kolon Industries plans to continue to expand its airbag business in China, with a possible third factory in the northeast region of the country.
*OPW(One Piece Woven) - Method for shaping fabric into air bags without seams, commonly applied to the production of side curtain airbags
Kolon Industries currently maintains the top market share in the Chinese airbag market. The company plans to further strengthen its dominance of the market through continuous investment. Currently, the installation rate of OPW side curtain airbags is relatively low in China, and rapid growth in the sector is therefore expected in the future.
Kolon Industry is exploring a site for a supply outpost for the European market within the next two to three years. With current production bases in China, Asia and the North American Region, Kolon Industries plans to continue to build production sites around the world to eventually reach 600 billion KRW in annual sales in airbags by 2020.
<Appendix: Airbag cushion market overview>
Estimated at 380 million units as of 2015, increasing automobile production as well as installation rate has allowed the global market to grow by nearly 10% per year.
The airbag market continues to grow thanks to stiffer safety regulations and customer demands for safer cars. In addition to traditional air bags, new products such as foot airbags, far-side airbags and safety belt airbags have been increasingly installed in new cars, making future prospects bright for the market.
Kolon Industries currently accounts for over 10% of the global airbag cushion market, and plans to continue its market share through aggressive expansion.
○ Kolon Industries set to begin the world's first colorless polyimide mass production in 2018
○ Transparent film expected to replace glass in smart phones, accelerate development of foldable devices
Kolon Industries (CEO Park Dong-moon) has finalized a decision to set up the world's first production facility for colorless polyimide film, according to an announcement released on August 1. The move is an aggressive investment decision aimed at creating an advantage for the company in the future display market.
Colorless polyimide film is a next-generation display material that is transparent and strong but capable of bending hundreds of thousands of times without cracking. The film is an indispensible material for smart phone manufacturing that are designing foldable phones as next-generation devices.
Kolon Industries will begin build the new production line in the third quarter of this year in its Gumi plant and complete the facility by the first quarter of 2018. The company will invest approximately 90 billion KRW in the new project, with potential sales of over 200 billion KRW per year. Kolon Industries will first create one production line, and add a second and third line based on market trends changes. The latest investment decision is a reflection of the company's plans to leverage new technology to take an early leadership of the next-generation display market for eventual market dominance.
Once product ion of the colorless polyimide film developed by Kolon Industries begins, smart phone manufactures will be able to accelerate the development and release of next-generation foldable smart phones. The new material is widely regarded as the optimal window cover material for these new types of phones, the development of which has been hindered to date by rigid glass that have so far been used as the main material for display window covers.
In addition to its use in foldable phones, colorless polyimide film can be applied to a wide variety of cutting-edge displays including rollable displays, and light and thin wall-mounted displays that can be easily be placed and removed from walls.
Kolon Industries has also been developing a high heat-resistant liquid colorless polyimide material as part of Korea's WPM* development project since 2010, as part of an effort to expand the application of colorless polyimide. The new material can be used to manufacturing touch screen and TFT panels, which will allow the development of large transparent computer display screens.
※ WPM(World Premier Material) : national development program led by the Ministry of Trade, Industry and Energy for identifying and support ten world-leading material technologies
Executive Director Gang Chung-seok, who heads Kolon Industries' colorless polyimide project, said, "The latest investment is the world's first project that looks ahead at the next-generation display market. Aggressive expansion will allow us to dominate the market and create a insurmountable technology barrier, making colorless polyimide one of our company's key new growth drivers."
"Kolon Plastics will continue to respond nimbly to market changes and add a second and third line if needed to quickly create economies of scale," added Executive Director Gang.
○ Mosquito-repelling and antibacterial MOS-LOCK developed amidst worries over Zika virus
○ Head, Elord to use eco-friendly mosquito-repelling fabric for Korea's archery and gold teams
Sending arrows soaring towards a 6.2 bulls-eye from 70 meters away, or driving a ball hundreds of meters into a tiny 10.8cm cup, are two sports that require the highest levels of concentration.
Kolon Fashion Material Inc. (CEO Lee Hae-un) unveiled a new fabric named "MOS-LOCK" designed to maximize the performance of Korea's archery and gold teams who will complete in the 31st Olympic Games in Rio de Janeiro, Brazil in August. Head, which will provide uniforms for the archery team, and Elord, supplying the gold team, will design uniforms using the MOS-LOCK eco-friendly, mosquito-repelling and anti-bacterial fabric developed by Kolon.
Kolon's MOS-LOCK infuses the surface of the fabric with encapsulated Pyrethrin, a natural pesticide material extracted from eucalyptus leaves, to ward of mosquitoes, flees and other pests. The fabric has been certified by Biogents, Germany's international certifier for mosquito-repellant materials, to have a repelling effectiveness rate of over 70% against mosquitoes.
Kolon Fashion Material's Seon Jong-hyeon, who headed the development team, said that "worries over the Zika virus leading up to the 2016 Rio Olympics motivated us to develop MOS-LOCK, an innovative fabric that will allow our archery and gold teams to concentrate on their game without worrying about disease-carrying mosquitoes."
In addition to its anti-mosquito capabilities, MOS-LOCK is odor-suppressing, moisture-wicking and fast-drying. The material keeps bacteria at bay and removes ammonium gas, the main culprit behind fabric odor, and retains its mosquito repelling properties even after more than ten washes.
○ New joint venture for POM production boasts world-class competitiveness, with maximum synergy combining BASF's chemical engineering know-how and Kolon Plastics' efficient production process
○ Market expansion expected in materials for lightweight vehicle construction
○ Testament to Korean manufacturing industry's technological excellence
Kolon Plastics will join hands with BASF, the global chemical giant, in an effort to carve out a presence in the global engineering plastics market. BASF's innovative technological know-how and Kolon Plastics' manufacturing technology will come together in a new manufacturing plant for polyoxymethylene, an engineering plastic that is receiving renewed interest as a material for weight-saving vehicle construction and other applications.
Kolon BASF InnoPOM, a joint venture established by the two companies, held a groundbreaking ceremony on the 27th in Gimcheon, Gyeongsanbuk-do for a new POM factory. The facility will begin producing 70,000 tons of POM per year from the second half of 2018. Combined with the existing facility, the plant will manufacture 150,000 tons of POM per year, the largest production capacity in the world for a single plant.
POM is used for automobiles, electronics, industrial devices and many more applications, with 42% of the global demand going to car making. Common components that use the material includes fuel pumps, door locks and safety belts. With global fuel efficiency and emission standards becoming more strict, reducing weight is no longer an option for carmakers but a necessity. Chemical companies around the world has thus been working to develop engineering plastics that are as strong as metal but much lighter in weight.
POM requires a complex manufacturing process that uses high pressure and temperatures, and only a handful of leading global companies including America's Celanese and Dupont, Germany's BASF and Japan's Mitsubishi hold key technologies.
The latest joint venture is significant as a testament to Kolon Plastics' technological capability, since the company will be supplying the main technology for a royalty fee. With global automakers on its list of main customers, BASF has chosen Kolon Plastics as its partner in an acknowledgement of the Korean company's technology for a simpler yet more efficient production process.
CEO Jang Hee-gu of Kolon Plastics said, "Kolon BASF InnoPOM will build a production plant with world-class competitiveness in POM manufacturing that will combine the extensive know-how of both companies, as part of a joint initiative to achieve 'the maximum level of productivity and quality' between two companies that have been competitors," adding that "Kolon Plastics' production process technology and BASF's extensive patents and production know-how for high-performance products will be combined together to create a world-leading production facility."
The new plant will make use of eco-friendly technologies that will cut energy consumption compared to exiting plants, and introduce BASF's strict safety and environmental management standards used in the company's German plants. These measures are part of a strategy to supply safe, reliable and long-lasting products to customers.
Kolon BASF InnoPOM will also create a business structure that will enable full production as well as sales. Kolon Plastics will take control of production while BASF will be tasked with the sales of the bulk of the products manufactured by the joint venture.
Director of Investment Policy Lee Sang-jin of the Ministry of Trade, Industry and Energy, who attended the groundbreaking ceremony, said that he "welcomes the joint investment by BASF and Kolon Plastics," and said that "the joint venture will allow Korean manufacturing technology to take center stage in the rapidly-expanding POM market as well as create new opportunities in the market for advanced vehicle materials."
Kolon Plastics is an engineering plastics specialist with visions for becoming a "Global Major Player" in the engineering plastic and high-tech material industry. The company manufactures and sells base products with world-leading quality and compounds that meet the diverse needs of its customers. Kolon Plastics maintains a sales network that spans 90 countries around the world including Japan, the United States and Europe, and offers optimal solutions that are founded on extensive technology, R&D capacity and global marketing capabilities. Kolon Plastics is listed on the KOSPI stock index. (www.kolonplastics.com)
- Kolon Plastics Gimcheon plant to have world's largest POM production facility
- New production technologies expected to deliver maximum efficiency
- New deal to allow company to supply specialty products to global market
Kolon Plastics and BASF announced on the 16th that the two companies have signed an agreement to establish a joint venture in Korea for the location production of polyoxymethylene (POM), an engineering plastic with wide application in many industries including automobiles and construction.
The joint venture, to be named "Kolon BASF InnoPOM", is a 50:50 joint company that will construct a new production line at Kolon's Gimcheon plant capable of producing 70,000 tons of POM per year, to enter full production in the second half of 2018. The new addition will increase the total POM production capacity of the Gimcheon factory to 150,00 tons per year, making it the largest single POM production site in the world.
Drawing on extensive experience in POM and other engineering plastic production, the two companies plan to leverage Kolon Plastics' high-efficiency production technology to manufacture products of the highest level of quality. CEO Jang Hee-gu of Kolon Plastics said, "The joint venture will further boost the strengths of both companies to create world-leading competitiveness and Kolon Plastics' advanced technology and excellent existing infrastructure will create a major synergic effect."
"The joint venture will further expand partnership opportunities for both companies," he said, adding that "government's efforts as well as new legislation passed by the national assembly aimed at relaxing regulations governing the creation of subsidiary companies were key in enabling Kolon to form a joint venture with BASF."
Kolon BASF InnoPOM's products will be sold around the world bearing each company's respective brands. President Raimar Jahn, head of BASF's performance materials division, said, "Kolon and BASF have maintained a close business partnership over many years," and said that "with the POM market growing around the world, the latest joint venture will allow us to supply innovative and high-performance products to our customers around the world, and especially in Asia."
BASF plans to halt POM production at its plant in Ludwigshafen, Germany once the new plant in Korea becomes operational in the second half of 2018.
POM resins are a type of engineering plastic that is highly durable and elastic with excellent insulation and chemical resistance properties, used in a wide range of applications including automobiles, electronics, consumer goods, medical equipment and construction. The material has become popular for carmakers with recent trends towards lighter cars.
Kolon Plastics' POM is sold under the brand name Kocetal®, with BASF offering a wide range of POM products under its Ultraform® brand.
○ Labor union takes lead in suggesting labor-management unity to overcome severe economic downturn
○ "Win-win Innovation TF" headed by union and supported by management to be launched
○ Labor and company representatives collaborate to support partner companies, local communities
With the global economic crisis threatening to undermine the competitiveness of Korean companies, Kolon Industries (CEO Park Dong-moon) has declared a commitment to "labor-management mutual cooperation and harmony".
Kolon Industries announced that CEO Park, representing the company's senior management, and head of the labor union Kim Yeon-sang made a joint declaration on the 28th at the company's Gumi plant in Gyeongsangbuk-do. The "labor-management unity" declaration was the culmination of efforts between the labor union and the management to establish a new relationship for the future of the company. The declaration was made at the suggestion of labor union leader Kim following the day's regular meeting of the labor union's council of representatives.
It is especially noteworthy that the offer to create a "Win-win Innovation Task Force" to overcome the company's business difficulties and create a culture of mutual cooperation between the labor organization and the company came not from management but the union. The labor union announced that the TF will assist in delivering cost innovation, capacity innovation and safety innovation, and create a workplace that is fun and fulfilling. The company, accepting the suggestion, plans to launch the TF within February.
The declaration by Kolon Industries to create labor-management cooperative framework stemmed from an awareness of the danger posed by excessive conflict and dispute between labor and management in undermining the company's competitiveness in the global market, especially at a time when the "New Normal" is presenting a serious threat to businesses world-wide. Kolon's labor union, which has always emphasized "Win-win partnership" presented the goal of "Win-win unity" to further encourage members to take part in the effort to overcome today's economic hardships and achieve change and growth.
Following the declaration, union head Kim stated that "Kolon Industries' labor activities have focused on labor-management harmony since we declared the principle of 'permanent non-dispute' in 2007," adding that "the union will present a model for labor-management cooperation and take the leadership in Korea's labor union culture."
CEO Park, in turn, expressed his enthusiastic support for the union head's offer and said, "The company will set an example for improving the employment environment and assisting the growth of the community." CEO Park also announced that the company's partnership fund will be expanded to provide practical assistance to the local community.
Both sides also agreed to explore new support programs for achieving a constructive and mutual development of partner companies as well as the community.
In 2007, at the height of the company's labor dispute, Kolon Industries shocked the business community when the labor union declared a principle of permanent non-dispute. Since then, the company's labor union and management have worked together to initiate programs for improving the workplace environment, such as better group accident insurance, more overseas training programs, building the "Happy Gumi" theme park, and creating a community development fund.
Labor and management have also worked closely together in adopting employment policies, including the agreement to improve the baseline "ordinary wage" in 2014 and extending the retirement age and introducing a peak wage system in 2015.
In 2015, the company also adopted a new promotion system that established a six-step track for technicians working in the field, who had previously suffered from not being afforded sufficient promotion opportunities, from "general employee-section head-technical manager-technical senior manager-master technician-senior master technician". The company also created a 2-day special training session that pairs up new, young employees with a senior employee to break down barriers between the new generation of employees and experienced senior personnel.
- Connecture 2016 (Connect + Future) announced as this year's management policy
○ Calls for new innovative technologies and growth drivers to boost competitiveness
○ Requests each employees to take ownership of roles and responsibilities, drive future change
○ Senior employees wear badge and wrist band inscribed with management motto to underscore commitment
The Kolon Group (Chairman Lee Woong-ryeol) held a "Joint Group New Year's Meeting" to mark the start of 2016 at the Kolon Tower main assembly hall on January 4, attended by the Group's executives and senior managers.
Chairman Lee declared the concept of "Connecture", a portmanteau of the words "connect" and "future", as the Group's core management principle during his New Year's address, emphasizing that the Group must "spare no effort in exploring new growth engines for the future before the doors of change close shut" in today's rapidly-transforming business environment.
Chairman Lee said, "Success will await Kolon in the future if every employee remains dedicated and takes ownership of his or her roles, work together and apply innovative technologies to meet the challenges of today's hyper-connected society."
Citing a passage from the Confucian classic Analects that states, "All that must be in place shall be in its place", Chairman Lee said that "all employees must do their part, no matter what company, department or position."
"We have transformed our mind-set for the past several years and now is the time to turn thoughts into action," said Chairman Lee, adding that "everyone must be prepared to be step up to the plate and deliver a home run when bases are loaded and we are in the bottom of the 9th inning."
For the past three years, Kolon's employees have adhered to the company's key management concepts, as defined by Chairman Lee, of the "Success Puzzle", where every piece of the puzzle is crucial to completing the entire set; the "Success Formula" that adds heart, multiplies passion and subtracts hardships to create today's success energy; and the "Timer 2015" philosophy that reminds everyone to remain vigilant and aware, as if keeping an eye on each passing second of the clock, to take every plan to 100% achievement.
Each year, Kolon Group designs and distributes badges that symbolize the corresponding year's management motto. Continuing this tradition, this year's badge containing the 2016 management philosophy was distributed during the day's event. The badge was shaped in the form of a magnifying glass examining the management motto of "Connecture". A message, "Nothing is Impossible", was also inscribed on the badge to further exhort the employees receiving it.
○ CEO Jang Hee-gu takes personal command, focuses on attracting new customers
○ Company takes part in FAKUMA 2015 international plastic expo
○ Showcases KompoGTe, other high-tech composite materials for cutting vehicle weight
Kolon Plastics (CEO Jang Hee-gu) began taking steps to enter Europe's lightweight materials market for automobiles by taking part in FAKUMA 2015, a leading international plastic industry expo, held from October 13 to 17 in Friedrichshafen, Germany.
Having participated in the FAKUMA event every year since 2012 to showcase a wide range of composite materials and other products, Kolon Plastics plans to respond to the recent rise in interest in lightweight materials around the global market by going beyond simply displaying its latest products to more actively court buyers and hold 1:1 business meetings during the event.
CEO Jang of Kolon Plastics personally attended the exhibition to meet with representatives from major engineering plastic companies including Germany's Chemieuro, Turkey's Resinex and Japan's Toray to assist in exploring new future growth engines. Prior to the event, the CEO visited strong small and medium materials companies in Sweden as well as research institutes to discuss plans for joint R&D programs for high-tech materials development. He emphasized that "Kolon Plastics has identified high-tech composite materials as one of the industry's most important growth engines and is building partnerships with companies in Korea and abroad to create a business portfolio that will drive our future growth."
The centerpiece of Kolon Plastics' exhibit at the show was KompoGTe, combining the advantages of both a carbon fiber composite thermoplastic and long-fiber-reinforced composite materials and widely regarded as a key next-generation weight-saving materials that is lightweight yet durable and highly workable.
At this year's exhibition, Kolon Plastics featured window rails (for car windows), bumper back beams (shock-absorbing component of the car bumper) and front-end module carriers (a part of an automobiles front frame) that use carbon fiber composite materials to cut weight by half compared to traditional metal parts. Products incorporating long-fiber-reinforced composite materials included head lamp brackets (supports for headlights), engine covers, seat under covers (cover for power seat electric components) and seat cushion frames.
* FAKUMA is one of Europe's top three plastic material exhibition, with over 1,700 companies from 36 countries taking part in this year's event to showcase their products to over 45,000 visitors. Participating in the event each year since 2012, Kolon Plastics has wowed visitors by putting on display an extensive range of engineering plastics and high-tech composite materials designed to provide weight-saving materials for automobiles.
○ Second airbag cushion plant to open in Julong, China in early August; production to start Q3
○ Nanjing plant to expand side curtain air bag production line
○ New expansion responds proactively to Chinese auto market growth, solidifies Kolon's leadership position in air bag cushion market
Kolon Industries (CEO Park Dong-moon) is working to further solidify the company's leading position in the airbag cushion market in China, the world's top automobile manufacturing center.
Kolon Industries opened its second airbag cushion factory in the city of Julong, near Nanjing, Jiangsu Province, and plans to expand the side curtain airbag production facility in its existing Nanjing plant. The new Julong facility as well as the Nanjing plant's side curtain airbag line is expected to begin full-scale production from the third quarter of this year.
Kolon Industries currently manufactures 12 million airbag cushions in its Najing plant annually, giving it the largest market share in China. The new Julong plant will produce 3.6 million cushions once comes fully on line.
The side curtain airbags manufactured by the Nanjing plant's expansion is a product that is relatively underused in markets outside of North America and Europe and thus capable of considerable growth in China. Kolon Industries plans to use the new line to further cement its leading position in the Chinese airbag cushion market.
Kolon Industries' airbag cushion maintains the highest share of the domestic market, supplying major Korean automobile component makers. The company actively began developing overseas sales routes from 2000, steadily expanding its market position by building the Nanjing plant in China in 2004, signing a large-scale supply contract provide Audi and Volkswagen with airbags in 2011, and supplying polyester airbag cushions to Chrysler in 2013 and Ford in 2015.
Senior Managing Director Choi Yeong-mu, who heads the company's airbag business, said that "the new investment is a part of our initiative to strengthen the global market competitiveness of our airbag cushions," adding, "We will continue to expand our business operations in China."
Kolon Industries plans to establish a solid advanced airbag production system, including one-piece woven (OPW)* airbags, and expand its existing facilities as well as add a third plant in China as part of its expansion efforts.
Currently the world's largest producer of automobiles, China churned out 19.98 million vehicles in 2014 and continues to grow at an average rate of 8% each year. With safety standards becoming stricter across the world, more cars are being equipped with airbags; the Chinese airbag market is expected to grow by nearly 15% each year until 2020.
Kolon Plastics (CEO Jang Hee-gu) will expand its market share in China, the world's number one automobile market, by launching local production of its key products.
Kolon Plastics announced on July 8 that the company has signed an OEM agreement for engineering plastic compounds production with Jiangsu Jianghansu Materials Ltd. located in Yangcheng, Jiangsu Province.
Kolon Plastic's preparations for building a production bridgehead in China went into full swing early last year. A quality check was completed with a test run of the local Jiangsu Jianghansu's production plant, with full production and sales set to begin in the second half of this year. Rising interest in hybrid, electric and other eco-friendly vehicles in the Chinese market has led to a rise in demand for engineering plastic, a key component for reducing vehicle weight. Kolon plans to exploit the market using locally-manufactured products.
The Huadong region, where the company is located, is home to a large concentration of global automakers, and parts, components and car electronics manufacturers that use engineering plastic for a wide range of products, providing an advantage for developing sales contacts. A spokesperson for Kolon Plastics reported that local companies are showing considerable interest in the company's latest deal that will deliver both quality and price competitiveness.
CEO Jang stated, "The business agreement will establish a local production system that will assist us in the Chinese market, the world's largest car market and a battleground for automakers from around the world," adding that the company "plans to continue to make efficient use of local production facilities in strategic overseas markets in Europe and North America."
Kolon Plastics estimates new local customers to boost its compound revenues in China by over 30% in 2016, and over 2.5-fold by 2020. The company's current compound exports to China amounts to approximately 20 billion KRW.
* Compounds: engineering plastic compounds produced by adding certain materials to each BASE product to enhance material properties. Kolon Plastics is engaged in a wide range of compound production and sales including PA (Polyamide) and PBT (Polybuthylene Terephthalate) as well as TPEE (Thermoplastic polyester elastomer) and PET(Polyethylene Terephthalate).
Airbag cushions from KOLON Industries (CEO Park Dong-moon) will be installed in four models of Ford Motor Company, one of the most reputed and favored automobile brands in North America. This deal is considered the company’s first important step in expanding its presence in the US market after the conclusion of the lawsuit with DuPont, raising expectations about the company’s future expansion into the global market.
KOLON Industries announced on the 10th that it has concluded a three-year airbag cushion supply agreement worth USD 38 million (approximately KRW 42.3 billion) with Autoliv, a US-based auto safety parts manufacturer. The contracted item is the OPW (one piece woven) side curtain airbag cushion, which will be installed in Mondeo, Lincoln, Fusion, and Edge. Autoliv is the world’s number one auto safety parts manufacturer, boasting a market share of 35 percent in the airbag module market. Autoliv will be assembling airbag cushions supplied by KOLON Industries and deliver the finished airbags to Ford Motor Company.
This feat is all the more significant as the airbag cushion was developed exclusively by KOLON Industries using polyester (PET). KOLON Industries has been focusing on the development of an airbag cushion made with PET instead of nylon yarn (Nylon 66) that is currently the main material in airbag cushions, and succeeded in its mass production in 2013. This PET airbag cushion is similar to a nylon airbag cushion in terms of strength and durability but lower in price. Thus, it is fast becoming the center of attention in the automobile market. KOLON Industries directly handled the entire process from the production of PET yarn to the making of airbags and secured technological and price competitiveness.
With the excellence of KOLON Industries-developed PET proven through the contract with Autoliv, the company is expecting an increase in orders for this material.
Executive Director Choi Yeong-mu, who heads the First Business Division, said, “The industry is paying attention to PET airbags that are lower in price and outstanding in quality. Although the market share of PET airbags stands at a mere 5 percent now, it is expected to rise to 20-30 percent within four to five years, and KOLON Industries will take the lead in its growth.”
KOLON Plastics (CEO Jang Hee-gu) announced that it showcased a number of newly invented materials, including KompoGTe (a composite material made with thermoplastic carbon fibers used to make automobiles more lightweight) and a material for 3D printing, at CHINAPLAS 2015 that was held over four days from the 20th in Guangzhou, China.
KOLON Plastics provided the opportunity for visitors to better understand what engineering plastics are through hands-on experiments. KOLON Plastics’ booth resembled a small laboratory with a wide range of devices installed, which allowed visitors to witness the characteristics of the plastics material of their choice. For instance, visitors could drop a metal weight on a plastic or try to break materials to test their strength. Also, a millstone-shaped device was used to test and check wear-resistance.
Visitors were also allowed to measure the weight of the composite material made with carbon fibers and compare it with a piece of metal of the same size to understand how lightweight it really is. The weight of KompoGTe is only 25 percent that of steel, but it is over ten times stronger and over seven times more elastic, thus favored as the material for automobiles, aircrafts, and spacecrafts.
KOLON Plastics also showcased INKRAYON, a new material for 3D printing. It is an eco-friendly material that meets the FDA’s standards. It is produced with harmless, flexible carbon fibers and thus is expected to be used in a versatile manner for baby products including toys and household goods. KOLON Plastics plans to release INKRAYON around August and mainly target the markets of educational materials and household goods. It will gradually expand INKRAYON’s applications and advance into the industrial 3D printing market.
CEO Jang Hee-gu said during his visit to the exhibition site, “We plan to further accelerate our advance into the global market by reinforcing our foothold in the rapidly growing automobile and electric and electronic goods markets of China. Composite materials with thermoplastic carbon fibers and materials for 3D printing will serve as an important driving force for us in the long run.”
One visitor at KOLON Plastics’ booth said, “It was a good opportunity to learn about the hard-to-understand concepts of strength and wear-resistance through different experiments. It cast new light on plastic as the material of the future that can replace metals. I did not know plastic could even be used for 3D printing.”
Invossa™, the world’s first gene therapy for degenerative arthritis currently under development by KOLON Group (Chairperson Lee Woong-yeul), now enters phase III clinical trials with approval from the US Food and Drug Administration (FDA). This is the first time in the industry that a gene therapy for degenerative arthritis has been approved to enter phase III clinical trials by the FDA.
Invossa™ is the official name for the new medicine that has been known as TissueGene-C (a development code). This name was coined in accordance with the FDA’s medicine naming guidelines and is undergoing preliminary review. Invossa™ stands for “an innovative arthritis treatment.”
TissueGene, Inc., a subsidiary of KOLON Corporation in the US, completed the Special Protocol Assessment (SPA) and decided to enter phase III clinical trials for Invossa™ with approval from the FDA on May 15th. SPA is a procedure aimed at minimizing the possibility of failure due to incorrectly designed clinical trials through consultation with the FDA in advance about the plan for phase III clinical trials, including evaluation indexes and ways to attain statistical significance.
Through the phase III clinical trials, about 1,020 patients across the US will be injected either with Invossa™ or a placebo and measured for knee function improvement, the intensity of pain, and the joint space width in order to assess the drug’s effect. Data collected during the testing will be included in the company’s submission for the Biologics License Application to the FDA. Once approved by the FDA after phase III testing, Invossa™ is likely to become the world’s first FDA-approved disease-modifying osteoarthritis drug (DMOAD).
CEO Lee Woo-sok of both KOLON Life Science and TissueGene said, “We are thrilled to gain approval from the FDA for the phase III testing. We hope to contribute to relieving the pain of 150 million patients suffering from degenerative arthritis across the world by successfully completing the trials." KOLON Life Science is carrying out phase III clinical trials in Korea with 156 patients at 12 college hospitals including Seoul National University Hospital, Samsung Medical Center, and Asan Medical Center. The company plans to complete the clinical trials by July of this year and apply for approval from the Ministry of Food and Drug Safety before the end of the year. CEO Lee said, "With its commercialization in Korea next year, we plan to also introduce Invossa™ in the Asian market. We expect it to help us expand our presence in the global arena."
Invossa™ is a gene therapy that treats degenerative arthritis by simply injecting healthy human allogenic cartilage cells and cells with growth factors that promote cell differentiation into the glenoid cavity of the knee with a syringe. These cells can be mass produced, and thus this product is expected to be an innovative treatment that can readily respond to the growing demand.
KOLON Industries (KOLON) announced that it has agreed to resolve the civil trade secrets dispute with DuPont on the 1st (Korean time) in the US District Court for the Eastern District of Virginia and the related criminal charges filed by the US Attorney’s Office and the US Department of Justice, Criminal Division.
These settlements allow KOLON to put the legal dispute with DuPont behind it, which has lasted for six years since 2009 over the development of KOLON’s aramid brand Heracron, and to focus its resources on the production and sale of Heracron in the global market.
CEO Park Dong-moon said, “We are glad that the civil and criminal disputes over Heracron are finally settled. The disputes were resolved in a mutually satisfactory manner.”
Pursuant to the settlements, the civil action filed against KOLON by DuPont is resolved, and KOLON is able to continue the production and sale of Heracron products. CEO Park added, “These settlements enable us to freely expand our aramid fiber business and reinforce our global presence.”
Under the agreement of both parties, DuPont will receive a total of USD 275 million as restitution. The criminal case was also resolved through the Plea Agreement. KOLON pled guilty to a single count of conspiracy to convert trade secrets and agreed to pay a fine of USD 85 million. In return, the US Attorney’s Office agreed to dismiss all other charges, including those related to theft of trade secrets and obstruction of justice. KOLON Corporation is also a signatory to the Plea Agreement and is bound by its terms. KOLON is required to pay restitution and the fine in installments over the next five years.
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