Textile Companies Transform into High-tech IT Ones

Textile companies are aggressively launching the development of IT items, finding ways out of the traditional businesses such as fabrics and textiles.

The decision was in line with the fact that with the worsening returns the existing textile-related business cannot achieve sustainable growth. Each company is in search for a new drive force of growth.

The IT item is a growth vitamin. According to the industry on Jan. 24, Kolon was approved to supply LG Philips LCD with Light Diffusion Film for Thin Film Transistor-Liquid Crystal Display (TFT-LCD) of laptops.

The light diffusion film is a product to increase luminosity by evenly diffusing light at the back of the TFT-LCD, which is used in various display units. At present, the global market of the films for TFT-LCD is scaled at 550 billion won a year and 180 billion won at home.

Last year, Kolon had already finished developing the light diffusion film and prism protection film for TFT-LCD, recently securing the system for mass production at its Kim-chun factory.

Toray Saehan Inc. that acquired the processed film business last year plans to invest 15 billion won into IT items this year.

The company produces films for Field Programmable Circuit Board (FPCB) used in computers and mobile phones, films for Multi-Layer Ceramic Capacitor (MLCC), light diffusion films, and prism protection films for TFT-LCD. Also, along with Toray Inc. in Japan, the large shareholder, the company plans to extend its products of IT items, including films for Indium Tin Oxide (ITO) and polarized films.

Cheil Industries Inc. had completed the construction of production facilities for IT items in Gumi, Gyeongbuk province, early last year. It is set to develop the facilities to a large-scale complex for electronic item research and production by investing additional 230 billion won by 2005. The items produced in Gumi are Electro-Magnetic Compatibility (EMC), secondary cell electrolyte, and electromagnetic interference shielding (EMS), all of which are unimaginable, considering the company’s fashion brand, Bean Pole.

Kim In-soo, managing director of Cheil Industries Inc., said, “The local textile companies’ launching of IT item business can be seen as business convergence.”

Business convergence is to combine two or more businesses into a new business model so as to overcome the limit of the existing one.

Besides, Kolon advanced in healthcare and biomedical businesses, while SK Chemical is preparing for environmental and life science business.

IT-related business is an opportunity for textile companies, which have been focusing on developing new chemical textiles and accumulating technologies of related items, to upgrade their research competitiveness of the existing businesses and produce high value-added products.

Lee Choon-sik, executive managing director of Kolon, said, “The businesses that we are newly launching, such as IT items, are technologically related to the traditional textile business. So we can expect synergy effect.”

Ho-Won Choi bestiger@donga.com