Kolon Industries Inc., a South Korean chemical and textile manufacturer, is downsizing its industrial film business amid weak demand and growing competition with Chinese rivals.
The company has decided to shut its film plant in Gimcheon, North Gyeongsang Province, and move some facilities and employees to its film factory in Gumi in the same province.
Established in 1985, the Gimcheon plant produces optical and industrial polyethylene terephthalate (PET) plastic film, general packaging film and nylon film for wrapping. The factory currently has 300 employees.
“Kolon wants to reduce its production volume through the shutdown of the Gimcheon plant,” said an industry official.
The company said in August that its two film plants had operating rates of about 70% and the company plans to lower the operating rates further. But it said it will not pull out of the film business entirely.
Kolon's CPI is a thin, transparent plastic film used in foldable devices as display cover window As of the end of September, the operating rates of the film plants in Gimcheon and Gumi each stood at around 65%, below the company’s other chemical plants’ operating rates of 81%.
KOREAN FIRMS EXIT FILM BUSINESS
Other Korean petrochemical companies are either reducing or shutting their industrial film businesses on weak demand from electronics makers, including TV makers.
The move also comes amid the rapid ascent of Chinese players.
Many Chinese petrochemical peers have jumped into the Information Technology film market, intensifying competition and deteriorating profitability.
Kolon Group's One & Only Tower SKC Ltd. sold off its film business last year.
The company sold its polarizer business to Suzhou-based Shanjin Optoelectronics for $200 million and its polarizer materials business to Hefei Xinmei Materials Technology Co. for 4.5 billion yuan ($616 million).
LG said it would instead focus on special premium film used in batteries.
Another Korean petrochemical firm, Hyosung Chemical Co., recently shut its film plant in Daejeon and moved equipment to its Gumi plant for downsizing.
Write to Jae-Fu Kim at hu@hankyung.com In-Soo Nam edited this article.
