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Kolon Industries Restructures Film Business Amidst Market Challenges

South Korea
k 120110.KO Mid and Small Cap 2000
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Kolon Industries Inc., a South Korean chemical and textile manufacturer, is scaling down its industrial film business in response to decreased demand and heightened competition, particularly from Chinese rivals. The company has made the strategic decision to close its film plant in Gimcheon, North Gyeongsang Province, and will transfer some of its facilities and workforce to its Gumi plant, located in the same province.

Established in 1985, the Gimcheon plant, which employs 300 people, specializes in the production of various films, including optical and industrial polyethylene terephthalate (PET) plastic film, general packaging film, and nylon film used for wrapping. An industry official noted that this closure aims to reduce Kolon’s production volume.

Despite the shutdown, Kolon Industries has stated it does not plan to exit the film business entirely. However, the company acknowledges the need to lower its operating rates, which stood at about 70% for its two film plants in August and had decreased to around 65% by the end of September. This rate is notably lower than the 81% operating rate of the company’s other chemical plants.

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