Hyosung is looking to Vietnam as the next step in its bid to dethrone Invista and become the world's largest spandex manufacturer.
The South Korean spandex giant said it plans to invest $100 million for a new plant near Ho Chi Minh City capable of producing 15,000 tons of Hyosung's Creora-brand spandex per year. The facility is expected to begin manufacturing by the second half of next year.
Greg Van Nunes, Creora's president of the Americas and Europe, said the Vietnam facility will meet the needs of Southeast Asian manufacturers. The plant will be able to quickly supply spandex fiber to fabric and garment manufacturers in areas such as Indonesia, the Philippines and Singapore.
"The facilities we put in place typically cover a subregion," Van Nunes said. "Vietnam was selected for a host of reasons, including location, costs and availability of resources."
Hyosung has been aggressively expanding its production capacity over the last two years, focusing on investing in new facilities around the world. In October 2006, the company added 6,000 tons of capacity by partnering with the Chinese producer Tongkook. In April, Hyosung announced it would spend $130 million to open a new facility in Turkey capable of producing 15,000 tons a year. At the same time, the company said it would invest $35 million to expand capacity at its facility in Zhuhai, located in China's Guangdong province.
Since last year, Hyosung has expanded its overall spandex capacity by 43,000 tons, with new facilities in Vietnam, Turkey and China and additional investment in its South Korean operations. The company expects to double its capacity to 92,000 tons a year by next year.
"The only region left for us to make a strategic investment in is in the Americas, and that announcement we hope to make sooner than later," Van Nunes said.
A list of potential locations in the Americas has yet to be completed, he said.
Van Nunes said there is ample opportunity to expand the use of Creora spandex fiber within traditional categories such as swimwear and intimates, and into new segments.
"We continue to estimate demand for spandex is growing at about 7 percent on average per year," he said.
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