Kolon Industries, under the leadership of the newly appointed President Heo Sung, is currently undertaking a reform for greater efficiency. With the market situation in the chemical industry worsening due to oversupply, the company has decided to reduce unnecessary expenditure and enhance business efficiency to establish a foundation for revenue generation.

According to the chemical industry on the 13th, there have been continuous analyses in the financial investment sector suggesting that Kolon Industries' performance last year was poor. Financial information provider FnGuide predicted Kolon Industries' annual sales last year to be 4.836 trillion won. This represents a 4.45% decrease from 5.0612 trillion won in 2023. The annual operating profit is forecasted to be 181.7 billion won, which would be a 15.7% increase from the previous year. This is analyzed to be due to a base effect, as the demand for tire cords decreased, leading to a sharp decline in operating profit in 2023.

Heo Seong, President of Kolon Industries, visits the establishment in Gumi on Nov. 9 to inspect the tire cord process. /Courtesy of Kolon Industries

Earlier this year, Kolon Industries set a business goal of enhancing 'Operation Excellence' to achieve efficient production. A representative from Kolon Industries noted, "Due to the nature of the chemical industry, there are product lines that need to be forced into production even when they shouldn't be. We plan to reduce these products," and added, "We are working to lower production expenses while maximizing productivity." The goal is to reduce unnecessary expenditure and eliminate oversupply to improve cost efficiency.

Recently, Kolon Industries launched an 'Operational Innovation Task Force (TF).' This TF, organized under President Heo and comprising approximately 30 members, plans to assess the current status by factory business before establishing innovation proposals within the first half of this year.

Kolon Industries headquarters. /Courtesy of Kolon Industries

Once the efficiency improvement efforts are completed, they are expected to have a positive impact on the production of tire cords, which is Kolon Industries' core product line. Kolon Industries' tire cord plant has recorded maximum operating rates this month, continuing from the fourth quarter of last year. This is due to the increased demand for replacement tires. Tire cords are reinforcement materials that serve as the backbone of tires. The availability of tire cords and petroleum resins is helping to offset weaknesses in aramid and other materials.

In addition, Kolon Industries has started preparations to expand its global network. In November last year, Kolon Industries completed the expansion of its aramid pulp plant in Gumi, North Gyeongsang Province, and is focusing on securing new clients. It is reported that Kolon Industries is seeking customers by utilizing the network of its automotive materials and parts division, recently merged with Kolon Glotech, in the United States, China, India, and Europe.