World’s leading spandex manufacturer, South Korea’s Hyosung Corporation is looking to set up its first-ever spandex manufacturing facility in India by 2019. This strategic tactic is projected to ensure the company gets a foothold in the Indian market. The company has set aside $100 million as seed money for its new unit and is reportedly looking at acquiring a 40 hectares in the AURIC industrial complex near Aurangabad in Maharashtra.
Additional investments will be made as per market demand and growth projections. Hyosung has a presence in India through a trading company in New Delhi. Its spandex brand ‘Creora’ has around 60 per cent of the country’s market share. Currently, the brand’s key areas are Islamic wear such as the hijab, lingerie, sportswear, denim and diapers.
Once the new factory is operational, the company plans to also enter the high-value-added premium market. It is also looking at growing its market share to 70 per cent. Setting up its own spandex manufacturing unit in India is part of Hyosung’s global expansion strategy wherein the company will promote Hyosung Vietnam as the global base for making core products (spandex and tire cords) to tap Europe and Asia, whilst Hyosung India will focus on the big domestic market.
The country’s current spandex manufacturing units are local companies that has a monopoly in this segment. Hyosung feels it has a significant chance of success as its internationally-acclaimed differentiator is function and quality and once operational, it expects profits to flow.
It does come as a surprise to trade analysts that the company has chosen to set up manufacturing facilities in India at a time when the country’s spandex market is on a high. Growing by an annual average of over 12 per cent, the market size is pegged at $200 million by 2020.