South Korea’s major conglomerates Hyosung Group and Kolon Group are seeking to expand investment in China where many Korean companies are grappling with snowballing losses amid growing hostility towards Korean products after Seoul’s deployment of a United States missile shield.

According to the textile industry on Sunday, Kolon Glotech Inc., Kolon Group’s car material making unit, recently set up a new entity in China, a prerequisite for the construction of a car sheet manufacturing site in Chongqing, China. The company has not decided the production capacity of the new factory and the date for its ground breaking, but it is expected to secure the factory site by the first half of next year, sources said.

An unnamed Kolon Glotech official said details including its size, production capacity and initial investment will soon be decided, confirming the company’s decision to build its Chongqing factory.

The company’s decision for an additional investment in China comes even after one of its main customers Hyundai Motor Co. is rapidly losing its ground in the country amid growing antagonism against Korean brands in the country that strongly opposes the Korean government’s decision to host the U.S. Terminal High Altitude Area Defense (THAAD) anti-missile system citing its own security reason.

Kolon Glotech produces car sheet fabrics and artificial turf and currently supplies its car sheet fabrics to Hyundai Motor’s Chinese operation. Market insiders are keeping a close eye on the investment decision of the textile company after many Korean companies operating in the country are struggling to maintain their businesses amid ongoing THAAD row. Kolon Glotech currently manages four Chinese operations in Beijing, Qingdao, Yancheng and Zhangjiagang.

Kolon is not alone in seeking the expansion of business in China. Another Korean conglomerate Hyosung Group has also decided to up investment in the country showing off its confidence in luring Chinese customers with its unrivalled advanced technology. Hyosung is seeking to build an airbag production facility in Changshu, a county-level city in Jiangsu province, at a cost of 67.2 billion won ($59.4 million). The company took over German airbag textile manufacturer Global Safety Textiles (GST) in 2011, completing the vertical integration of its textile production and distribution steps for lower costs and higher efficiencies.

For its flagship spandex business, Hyosung is also mulling ramp-up of its Quzhou factory, according to sources. The largest spandex maker with a global market share of 32 percent ships 20 to 30 percent of its products to China.

Shares of Kolon closed Monday down 2.29 percent at 68,300 won, while shares of Hyosung closed 0.98 percent up at 154,000 won.

By Kang Young-woon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]