Hyosung Group rides the global economic recovery

Hyosung Group has nearly doubled in size in a matter of months, helped along by rebounding economies globally and strong demand for spandex.

It currently ranks No. 29 by assets on the Fair Trade Commission's annual list of "large business groups." The market capitalization of the listed companies in the group jumped from 5 trillion won ($4.4 billion) in December 2020 to 9.5 trillion won now.

Hyosung Corporation reported its best quarterly results ever in the January-to-March period, with net profit coming in at 91.7 billion won. In the same period last year, Hyosung lost money. Operating profit during the same period skyrocketed 1,788 percent on year to 100.6 billion won.

The majority of the company's profits come from shareholdings in other companies.

Hyosung TNC, Hyosung Advanced Materials and Hyosung Chemical all reported earnings surprises for first-quarter, and Hyosung Corporation owns about 20 percent of each of these companies.

A manufacturer of functional textiles like spandex, Hyosung TNC's quarterly net profit soared 585.2 percent on year to 180 billion won. Hyosung Advanced Materials, a supplier of auto parts like tire cords, air bags and carpets, reported a 551.9 percent growth on year in net profit to 54.2 billion won. Hyosung Chemical's net profit skyrocketed 3,881.6 percent on year to 41.9 billion won.

The businesses of the three Hyosung companies are somewhat interconnected. Hyosung TNC sources terephthalic acid from Hyosung Chemical to produce fiber yarn. Hyosung Advanced Materials sources that fiber yarn to manufacture tire cords.

Their recovery this year is related to the recovery of the apparel and auto industries. Demand for spandex in particular has surged. The material is used in functional sportswear and face masks.

Building spandex factories takes at least a year. But many manufacturers in the field postponed investment after the pandemic started. Hyosung TNC is currently operating plants in Gumi, North Gyeongsang, China, Vietnam Turkey and Brazil at full capacity to meet demand.

Orders for tire cord at Hyosung Advanced Materials are increasing as well as auto demand booms. Tire cords are reinforcing materials hidden inside the vehicle tires, aimed to help maintain its shape. Hyosung also sells carbon fiber, the material used for fuel tanks in hydrogen powered vehicles.

Hyosung Chemical benefited from a demand surge for syringes, for which it supplies polypropylene. Higher demand for chips and IT devices, backed by social distancing measures, increased orders for Hyosung's industrial gas used for chip production.

Hyosung Group's achievement comes in four years since current Chairman Cho Hyun-joon took up the office 2017. Cho is the third-generation from the family to lead the group, which in 2018 adopted a holding company structure.

This year, Cho was officially recognized by the FTC as the new head of Hyosung Group. Previously, his retired father was registered as the head of the group.

BY KIM KYUNG-MI, SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]