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Binh Duong secures $1bn South Korean project

Released at: 21:40, 26/11/2016

Binh Duong secures $1bn South Korean project

Photo: Korea Business Herald/Binh Duong/Courtesy

Kolon Group to invest in automobile tire cord and airbag plant in southern province.

by Hong Nhung

South Korea’s Kolon Industries Inc., a subsidiary of the Kolon Group, is planning to develop a $1 billion plant manufacturing airbags and industrial fabric for automobile tires in southern Binh Duong province, to capture a larger share of the domestic and international markets.

“The South Korean investor has selected the Bau Bang Industrial Park (IP) for its project,” Mr. Duong Tan Thanh, Head of the Foreign Economic Relations Cooperation Division at the provincial Department of Planning and Investment, told VET on November 25.

The company signed a memorandum of understanding on the investment plan with the Binh Duong Provincial People’s Committee a few days ago, he said. Kolon Industries has also announced it will lease an area of 42 ha from the Investment and Industrial Development Corporation (Becamex IDC) at the expanded IP.

Total investment capital for the project’s three stages is estimated at around $1 billion, in which the first phase, lasting from 2017 to 2018, will receive $220 million and the second phase, from 2018 to 2026, $600 million. The $1 billion mark will be hit sometime after 2026, in the third phase.

“The firm spent more than two years examining many provinces and working with a number of partners in Vietnam as well as neighboring countries before selecting Binh Duong for the project,” said Mr. Park Dong Moon, Chairman and CEO of Kolon Industries. It found the Bau Bang IP to be the most reliable and suitable, he said.

Binh Duong has taken a number of measures to turn itself into an attractive destination for domestic and foreign investors, according to Mr. Tran Thanh Liem, Chairman of the Provincial People’s Committee.

As at the end of October it had attracted 2,818 projects from 59 countries and territories around the world, with total investment of $25.6 billion. South Korea is the third-largest investor in the province, with 594 projects worth nearly $2.4 billion.

After establishing its first nylon production factory in 1957, Kolon Industries has become a leading South Korean multi-sector and transnational corporation. It is currently expanding operations in four major business divisions: industrial materials, chemical, electronic materials, and fashion.

Main products include automobile tire cords, airbags, film used for the electricity industry, electronic products, and fashion. In 2015 it opened a shopping mall built from shipping containers, the first of its kind in South Korea. It has a US subsidiary, Kolon USA Inc., selling polyester film and nylon film. The company earns approximately $100 billion in revenue each year and has factories in South Korea, China, Indonesia, and Mexico.

It plans to globalize its business lines in automotive materials, advanced materials, optical film, chemicals, and fashion production by increasing investment in high-value products. The Kolon Group also wants to expand in Vietnam via developing another project, possibly also in Binh Duong. It is currently in negotiations over the project and no further information is available.

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