Hyosung operating profit tops 1 trillion won for first time

By Choi Sung-jin

Hyosung, a conglomerate focusing on textile and chemical business, recorded an operating profit exceeding 1 trillion won ($827 million) last year, the first time it has done so, industry sources said Monday.

Contributing to the landmark performance were brisk sales of its spandex brand, “Creora,” and tire cords, the sources said. “In addition, Chairman Cho Suk-rae’s technology-first management has helped to create product portfolios that could tide over the global economic slowdown,” an analyst said.

Heungkuk Securities estimated Hyosung’s operating profit last year to exceed 1 trillion won, for the first time since the company was founded in 1966. Its operating profit rate of around 8 percent is higher than its Japanese rival Toray’s projected 6.6 percent in the 2016 financial year, which ends in March.

Another contributor was the revival of the conglomerate’s heavy industry unit, the sources said. It has recently developed a technology that saves power loss in transmitting electricity, and it has been very successful in India, Panama and Mongolia, a company official said.

Hyosung is one of only three companies in the world, and the only Korean one, that has successfully commercialized the technology. The heavy industry unit’s share of the total operating profit surged to 15.8 percent in the first nine months of last year, compared with 1.8 percent a year ago.

Cho, educated in Japan and the United States, invested heavily in research and development even in the middle of the 1997-98 financial crises, despite numerous calls for downsizing. “It takes long time for R&D efforts to bear fruit,” an analyst said. “Hyosung could succeed because it has an owner who was prepared to wait for such a long time.”