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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] SEOUL – Taekwang Industrial announced on July 31 that it will withdraw from its spandex business in China, shuttering operations 20 years after entering the market, due to continued losses from global oversupply and weak demand in China.
The company’s board approved the decision on July 30, resolving to halt production at Taekwang Huaxian’s Jiangsu spandex plant in August. All remaining inventory will be cleared by October, with business activities fully wound down thereafter. By year-end, the company aims to complete accounts receivable collections and terminate employee contracts for the site’s 502 workers.
The board also approved a ₩100 billion rights offering to fund the withdrawal process.
Taekwang Industrial, which commercialized spandex for the first time in Korea in 1979, established its China subsidiary in 2003 to secure overseas production capacity. After completing plant construction, commercial production began in 2005 at 27,000 tons annually, later expanding to 29,000 tons.
However, spandex demand in China has plummeted over the past three years, with cheaper domestic competitors flooding the market and global oversupply further eroding margins. The Jiangsu plant’s utilization rate steadily declined, leading to ₩93.5 billion in cumulative operating losses over three years, including a ₩7.2 billion loss in Q1 2024.
Taekwang Industrial concluded that industry oversupply and weak Chinese demand are likely to persist, leaving little prospect for recovery — prompting its decision to fully exit the China spandex market.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
