In January this year, Kolon Industries' (KOLON) industrial materials sector, which merged with KOLON Glotech's automotive materials and parts sector, is leading performance growth. The price of aramid, known as 'super fiber,' which is Kolon Industries' main product, is also rebounding, indicating that the upward trend in the industrial materials sector is expected to continue.
According to the industry on the 1st, Kolon Industries' revenue in the industrial materials sector for the first quarter of this year was 590 billion won, a 4.3% increase from 565.6 billion won in the first quarter of last year. This sector accounts for 48% of Kolon Industries' total revenue of 1.2316 trillion won.
The increase in industrial materials revenue is attributed to the rise in sales of mobility sector products, including high-quality synthetic leather chamois (PET suede) and tire cords (tire reinforcement materials), in addition to car seats. The mobility sector was established by combining KOLON Glotech's automotive materials and parts sector with the existing industrial materials sector of Kolon Industries.
KOLON Glotech has a sales network in major automotive markets, including the United States, China, and India. This network has contributed to increased sales of existing Kolon Industries products. A representative from Kolon Industries noted, "Our global market responsiveness has strengthened since the merger."
The core product, tire cord, is maintaining stable sales. Kolon Industries supplies tire cords to tire manufacturers such as Continental and Goodyear. Kolon Industries made equipment investments at its plant in Vietnam last January; once the construction is completed, production capacity will increase from 36,000 tons to 57,000 tons annually.
Aramid, referred to as super fiber, is also showing signs of recovery despite the recession. In the past five years, the export price of aramid per ton peaked at $23,800 (approximately 32 million won) in May 2023 before falling to $14,400 (approximately 19.5 million won) in April, but it rose to $15,400 (approximately 20.8 million won) in May.
Aramid is noted as an essential material for telecommunications network production due to its strength and tensile strength exceeding that of steel. The United States has started a telecommunications network expansion worth 60 trillion won, and China's investments in 5G are expected to increase demand. Kolon Industries invested 300 billion won last February to expand aramid production capacity from 7,500 tons to 15,310 tons and recently increased the plant's operational rate.
The securities market has a positive outlook for Kolon Industries' performance this year. According to financial data company FnGuide, Kolon Industries' revenue is expected to reach 5.1343 trillion won, with an operating profit of 196.6 billion won. Revenue is projected to increase by 6% compared to last year, and operating profit is expected to rise by 23%.