T The Korean government recently launched its ambitious $ 480 million "Milan Project" designed to establish the city of Taegu as a world-ranking center of excellence in the textile industry on a par with Milan of Italy. The announcement of the project drew special interest at home and abroad as the textile industry has widely been regarded among the Korean public and the business community as being in decline. Furthermore, critics questioned why the government conceived such plan and whether, as a result, the textile sector will be able to achieve international competitiveness.
 Korea's textile industry has led the country's much-celebrated export promotion drive since the 1960s.
In 1971, exports of textile goods accounted for 40 percent of the country's entire overseas shipments. Industry exports also hit the $10 billion level in 1987 for the first time as a single industry.
Last year, textile products registered $18.4 billion in exports, becoming the nation's second-largest export item after electronic products, including semiconductors. The trade surplus in this line of product reached $13.4 billion. Korea's textile sector has registered a trade deficit only three times since the 1960s, including the occasion of the second oil shock in the early 1970s. The industry plays an important part in the national economy employing a total of 452,000 people, or 15.6 percent of the entire industrial workforce.
 On the evidence of the statistics, textiles cannot be considered a declining industry. Rather, the importance of the industry has even heightened recently in the national effort to cope with rising unemployment and the financial crisis. The nation's textile industry ranks fourth in the world after that of China, Italy and Germany, while its facility size stands at seventh. Its technology is considered to be 85 percent the level of that in Western industrialized nations.

Prime Mover of Textile Industry
Development: the Chemical Textile
Industry

 Boosted by development of new resources and synthetic textiles through application of state-of-the-art technology, demand for textile products has diversified rapidly. New markets have emerged, and continue to emerge, in the areas of daily necessities, engineering, construction, the information industry, environmental material, bio-technology and aerospace. Research and development into ultra-thin yarn and artificial leather require leading-edge high technology. The general impression of the textile industry as a less-developed and labor-intensive industry no longer holds water, especially in regard to chemical textiles.
 The history of the nation's chemical textile industry began in 1959 with the production of vinyl fiber (PVA fiber). The industry began manufacture of nylon F in 1963, acrylic SF in 1967, polyester SF in 1968 and polyester F in 1969. The textile industry was the major engine of the nation's export drive from the late 1960s under the five-year economic program. In response to burgeoning overseas sales of textile products, the chemical textile industry underwent a rapid transformation as the supply channel of resources and material. This development was buoyed by the rapid growth upstream of the petrochemical industry and downstream of the synthetic fabric industry. The proportion of chemical textile products among exports of the entire textile sector reached 93 percent in staple fibers, 83 percent in yarns and 57 percent of fabrics.
 The development of the chemical textile industry has been mainly due to the larger enterprises on account of the immense facility investment required. Armed with sufficient capital and superior personnel, these companies have pursued facility investment to boost their productivity to world-class levels. The industry has also outperformed its foreign counterparts in terms of price and quality. The industry's chemical textile manufacturers number 16, 14 of which produce polyester filament. Of these 14, five manufacture polyester SF; four nylon F; two nylon SF; two acrylic SF; and one, acetate textiles, respectively. A large number of chemical textile companies have vertically integrated the production of petrochemical products, fabric goods, and fashion goods. Nine of them directly manufacture or have subsidiaries which produce raw materials such as TPA, EG, Caprolactam and AN which go into their end products, thus giving them a competitive edge with respect to manufacturing costs. Accordingly, the entry of fabric makers into the chemical textile area has spurred a synergy between the manufacture of original textile on the one hand, and of fabric goods on the other.

Korea's Chemical Textile Industry in the World

 The Korean chemical textile industry has undergone remarkable growth to become the world's fourth-largest after that of the United States, China, and Taiwan. Korea is the third-largest maker of both polyester filament and polyester staple fiber with outputs of 4,699 tons, and 2,291 tons per day, respectively. The average facility size for polyester staple fiber production is the largest in the world at 458 tons. The industry's output of nylon filament at 1,867 tons per day is the world's fourth-largest, and manufactures the eighth-largest volume of acrylic staple fiber at 417 tons per day. The industry possesses world-class facilities for the production of spandex, which has emerged as a high-potential, high value-added product. The output of the chemical textile industry is evenly split, 50/50, between exports and domestic consumption. Korea's chemical textile product exports - staple fiber and filament yarns - reached $2.3 billion in 1997, the world's second-largest after Taiwan. Major export markets are the United States, the European Union and Southeast Asia. Lately, the industry has diversified into East Europe, Latin America, the Middle East and Africa.

The Move to High Value-Added Goods

 The chemical textile industry has led the technological development of the entire textile sector since it provides materials for the production of its end products. Investment in the chemical textile sector worldwide has been intense and produced tangible results.
 Domestic manufacturers have also upgraded their technology to world-class levels through steady investment.
 The domestic industry is currently producing new synthetic textiles such as peachskin and high-quality material for women's clothing like silklike. It also produces industrial materials such as geo-textile goods for construction and engineering purposes, tire-code yarn, fishing net, and ropes. In addition, its product range in this genre includes various functional materials for water-proof, heat-proof, electrical insulation, temperature-sensitive, and ultra-violet protection applications plus other special-purpose textile goods. Individual companies also export around the world, capitalizing on their accumulated expertise and seeking technology licensing agreements with potential partners.

 The development of high value-added products has been the key tactic for domestic industry players to establish themselves as world leaders in their respective areas of competence, outperforming its mainly Asian competitors, in particular, Taiwan. The strategy of the chemical textile makers to this end has been to focus on developing differentiated goods of relatively high quality. The move in this respect has been pronounced among the large companies.
 Differentiated products now make up 55 percent of SK Chemical's entire turnover. In value terms, the proportion reaches 65 percent. The company has realigned its research and development sector into three divisions dedicated to long textile, short textile, and resin material, respectively. The company's main products include June, Renova, Novote-3 and Viace. June has become a material of choice for blouses and dresses on account of its deep color, excellent volume, and soft touch. It is priced at $1.80 per pound, five-fold that for other material for similar applications. Renova, with its natural wool touch, and ultra-thin yarns Novote-3, and Viace, are representative of the company's high value-added products.
 Saehan Industries has also concentrated on developing a differentiated product line. Among polyester filaments, its main item, the share of differentiated goods rose to 60 percent this year up from 50 percent last year. Evica has emerged as the company's leading product, priced three to four times higher than other general materials. Evica, which features the touch of natural leather, has been an outstanding example of a small- production differentiated product. The company offers 120 different types of material and has generated sales of 100 billion won since it began marketing the lines two years ago.

  Hyosung Corporation's major product is Fine Star, which returned the firm five billion won in turnover in the two years since it was launched. Despite its relatively small turnover, Fine Star produces a 30 percent profit margin, and led the company's fabric division back into the black after a period of losses.
 Tire cord, a complementary chemical textile material applied to the inside tires to enhance their durability, is also one of Hyosung's major product lines. In particular, the high value-added polyester tire cord has achieved recognition in major markets such as the United States as evidenced by an increasing volume of exports. The company plans to export 400 tons of the material per month to a U.S. tire maker from late this year and is seeking to expand its production facilities despite weakening economic trends.
 Samyang Corporation's chief products include the break-through Twin Skin, a micro-fabric material which uses ultra-thin yarns. Samyang's technological ability is apparent in the development of the artificial leather Fachino, and the fragrant Green Tree.
 Kolon has earmarked $14.3 million for research and development this year, up 70 percent from a year earlier. Chamude is a high value-added state-of-the-art artificial leather product using an ultra-thin yarn with a thickness of one twenty-thousandth that of a hair. Kolon recently succeeded in developing Nopola, a transparent, environmentally-friendly plastic material that can act as a substitute for glass and for which it has acquired patent rights in 17 countries. The company plans to begin production of the material next year with projected sales of 100 billion won and 400 billion won in 1999 and 2000, respectively.

Major Korean Chemical Textile Corporations
Company	Main Products	Tel / Fax
Hanil Synthetic Fiber Co., Ltd http://hg.hanil.co.kr	Acrylic Fiber & Products, PP Spunbond	(82-2) 791-1114 / (82-2) 791-1616
Taekwang Ind. Co., Ltd	Acrylic Fiber & Products, Nylon Fil., Spandex	(82-2) 3406-0300 / (82-2) 273-9160
Kolon Industries, Inc. http://www.kolon.co.kr	Nylon Fil. & Products, Polyester Fil. & Products, Spunbond, Tire Cord, Video Tape, Nylon & Polyester film, Engineering Plastics	(82-2) 3677-3114 / (82-2) 3677-3679
Kohap Ltd. http://www.kohap.co.kr	Nylon Fil. & Staple, Polyester Fil. & Staple, Fabrics, Polyester & Nylon Resin, Polyester Film, PTA	(82-2) 3702-7000 / (82-2) 3702-7598
Hyosung Co., Ltd. http://www.hyosung.co.kr	Nylon Fil. & Staple, Fabrics, Stocking Yarn, Carpet, Tire Cord Fabrics, Nylon film, Spandex, Engineering Plastics, PET Bottles, PP Resin	(82-2) 707-7000 / (82-2) 707-0130
Daehan Synthetic Fiber Co., Ltd.	Polyester Fil. & Staple, Fabrics	(82-2) 3406-0300 / (82-2) 273-9160
SK Chemicals Co., Ltd. http://www.skchemicals.com	Polyester Fil. & Staple, Acetate Fil., & Tow, DMT/PTA	(82-2) 273-3131 / (82-2) 273-3050
Samyang Corporation http://www.samyang.co.kr	Polyester Fil. & Staple, PP Spunbond, PET Bottles	(82-2) 740-7114 / (82-2) 740-7841
Hyosung Living Industry Co.,Ltd. http://www.hyosung.co.kr	Polyester Fil. Fabrics, PTA, Polyester Film, Video Pancake Tape	(82-2) 707-7000 / (82-2) 714-9573
Saehan Industries Inc.	Polyester Fil. & Staple, Fabrics, PET & PP Spunbond, Polyester Base Film	(82-2) 3468-7000 / (82-2) 3468-7081
Jeil Synthetic Fibers Co., Ltd.	Polyester Dope-dyed Yarn	(82-2) 581-9220 / (82-2) 581-9224
Tongkook Synthetic Fibers Co., Ltd.	Polyester Fil. & Products, Spandex	(82-2) 727-9700 / (82-2) 778-4134
Hankook Synthetics Inc. http:www.ehwa.co.kr	Polyester Fil. & Products	(82-546) 461-9770 / (82-546) 461-1729
Daeha Synthetics Inc.,	Polyester Fil. & Products	(82-546) 470-0701 / (82-546) 471-2080

 Kolon Industries was founded in 1957, the core enterprise of what later developed as the Kolon Group. The company currently produces original yarn, original fabric, film, plastic, precision chemical and artificial leather goods. It has launched new businesses in the area of water purifiers and medical equipment. Kolon Industries completed the construction of a computer-integrated manufacturing plant in Kimchon, Kyongsang-pukto, late last year six years after ground was broken for the project in 1992. Since commencing operation the plant has greatly enhanced the firm's competitiveness.
 Kolon Industries also launched production of an ultra-thin yarn and tire cord, products which have received acclaim from major clients such as Goodyear on account of their quality and innovative technology. The company also manufactures the environmentally-friendly plastic Nopola, and a variety of films for which it received the ISO 9002 certification. Kolon Industries marked up 1.878 trillion won in sales in 1997 and posted a turnover of 710.2 billion won for the first half of this year, up 35.5 percent from the same period of last year. Its account profits amounted to 20.3 billion won in the first six months of this year, a 75.4 percent increase on a year-to-year basis.

 Samyang Corporation was established Oct. 1, 1924 by farmers as an agricultural business. It entered the sugar industry in 1955, establishing a precedent for transforming farming capital into modern industrial capital in what was then a largely agrarian society. It advanced into the polyester business, setting up a huge plant in Chonju. In 1970s, the company diversified into the animal feed, precision chemical and pollution control industries. In the early 1980s, Samyang began the manufacture of PET bottles and took over food-related enterprises like Samyang Genex, and Shinhan Milling. It also established high-polymer chemical subsidiaries. In 1990 it split the operation of its business into medical and trade divisions.  The company achieved a turnover of 1.37 trillion won in June this year after it first hit the one trillion won level in sales in June, 1995. It expects to record 1.5 trillion won in turnover by June, 1999.
 Samyang can produce 650 tons of short polyester textile and 420 tons of long polyester textile per day, respectively. The firm's major items include polyester chips, polyester SF, polyester filament, polyester fabric, ion resin, engineering plastic, solid-phase polymerization chips, and PET bottles.

 Saehan produces a wide range of fiber and textiles from polyester staple fiber to finished fabrics. Saehan textiles are characterized by high performance to meet the changing trends of the fashion industry as well as the demand for high value-added products. The major products of Saehan's fiber and textiles division are:
- polyester staple fiber, polyester filament and spandex
- fabrics made of polyester filament, polyester/rayon blend and corduroy
- knitted products made of polyester filament, nylon and spandex
- student and work uniforms
- speciality fabrics with shape-memory finishing
 With a production capacity of 320 tonnes per day, Saehan produces a variety of polyester filaments to meet the needs and demands of customers throughout the world. In particular, the production of ultra-fine filament and ultra-high speed spun filament significantly enhances the value-added component of fabrics. Equipped with specialized lines for producing polyester staple fibers at a production capacity of 410 tonnes per day, Saehan can easily meet customers' demands for apparel and non-apparel applications, such as automobile interiors, toy stuffing, and canvas. Saehan's fully-integrated line for dope-dyed fibers significantly reduces production costs for the textile industry.

 The high-quality textile Evica, made of speciality synthetic filaments by sophisticated tensionless processing, is gaining popularity amongst garment manufacturers at the higher price range of textile market. Part of Saehan's product spectrum are function-imparted textiles such as Saentech, which enhance wearer comfort while providing protection against downpours. In such an event the exterior of the fabric will be wet, but its interior will remain dry while retaining warmth. Elasto, a stretchable corduroy, first produced in Korea by Saehan in 1981, continues to be in high demand.
 Elite fashionable school uniforms, made of specially-finished textiles, and Success VP shape-memory textiles are just some of the results of more than 25 years' experience of meeting customer needs in the textile industry.

 Since the company's inception, its synthetic fiber division has been instrumental in Hyosung's growth. Registering high growth every year, its annual production is the largest in Korea and is one of the top four in the world. By successfully adopting and operating FDY, spin draw, and other innovative processing systems, Hyosung has become the leader in the synthetic fiber industry in both processing and production. The synthetic fiber division produces high-quality nylon F yarn for apparel, industrial materials and tire cords. The synthetic fiber division also makes yarn for pantyhose, BCF yarn for carpeting, and polyester F yarn for industrial materials.
 The synthetic fiber division has successfully advanced into high-elasticity spandex and plans to enhance production through capacity expansion. To augment its international competitiveness, Hyosung now puts the utmost effort on improving quality while developing new yarns. As part of its drive to increase its share of overseas markets, Hyosung has opened a factory in Sri Lanka.
 After developing Korea's first nylon tire cord in 1968, Hyosung has become a major player in the field of industrial material. Hyosung now produces polyester tire cord, steel cord, and nylon tire cord; the production of all three has contributed to the growth of the domestic tire industry.
 Taking advantage of its experience and technology in the synthetic fiber business, Hyosung established a firm base in the fabric market. The company has set up a comprehensive manufacturing system ranging from weaving to dyeing and has developed new materials and new fabrics in collaboration with the Central Research Institute.

by Jeongdong Kim