KCC Glass moved to expand into overseas markets with Indonesia as a base but ran into the hurdle of a Vietnam tariff. It is not yet at the stage of exporting large volumes in earnest, but as it wavered under China's low-price offensive, changes in the global trade environment emerged as a potential risk factor.
According to the flat glass industry on the 6th, the Vietnam government is applying a provisional anti-dumping tariff (about 15%–40%) on colorless float glass from Indonesia and Malaysia. An anti-dumping tariff is a tariff imposed when foreign corporations sell products cheaply and harm a country's domestic industry. The Vietnam government currently plans to levy the tariff for 120 days, but there is a possibility it could be converted into a final tariff depending on the situation.
Since 2021, KCC Glass has invested about 300 billion won to establish an Indonesia subsidiary and a production base. The Indonesia plant is KCC's first overseas production base, with an annual flat glass production capacity of 438,000 tons. It set plans to expand sales not only in Indonesia but also to other countries including the Philippines, Vietnam, and Australia. The float glass subject to the Vietnam government tariff this time is a basic material for architectural flat glass.
The Indonesia subsidiary's performance is falling short of expectations. As of the third quarter last year, it posted sales of 44 billion won, but the net loss reached 63 billion won. Performance also worsened as it reflected an impairment loss on existing inventory asset in accounting. In 2024, it also recorded a loss of about 22 billion won. As Chinese companies supply large volumes to Indonesia, it is also struggling to gain a foothold in the local market.
On top of this, the global trade environment is also on a worsening track. As low-priced glass from Indonesia and Malaysia poured into the Vietnam market, Vietnam companies pushed back. The Vietnam government locked the gate not to collect taxes but to protect its glass industry. This created a variable for KCC Glass, which planned to enter new markets such as Indonesia and Vietnam.
A KCC Glass official said, "We are currently in the stage of testing export feasibility, so it is difficult to specify the size of sales," and added, "It is true this is a potential variable, and we will have to assess it properly if we secure clients and export through a transaction, but for now it is not to the extent of a direct impact."
Procedures in the United States to impose anti-dumping and countervailing tariffs on float glass from China and Malaysia have also entered the final stage, emerging as a future variable. While Indonesia-origin products are not those surveyed directly, if tariffs are imposed on China- and Malaysia-origin products, a "balloon effect" could occur in which those volumes shift to other countries. As a result, if global price competition intensifies, there is an outlook that it could also affect KCC Glass's strategy for developing new markets.
An industry official said, "Recently, the float glass market is at a phase where trade regulations in each country and changes in supply flows are occurring simultaneously," and added, "If the U.S. tariff measures materialize, as the global glass supply chain is readjusted, there is a strong possibility that export flows will also change."
The official added, "KCC Glass, which operates a production base in Indonesia, will also need to adjust its market strategy amid these changes," and said, "In Southeast Asia, price competition may intensify, while in North America, some substitute demand could emerge."