[THE INVESTOR] Kolon Industries will be boosted by expanding manufacturing capacity of industrial material aramid, said KB Investment and Securities on Sept. 12, maintaining a “buy” recommendation and 85,000 won (US$75.43) target price.
It has announced that it will build a factory in Gumi, North Gyeongsang Province, by the first quarter in 2020, which will increase its manufacturing capacity of the fiber by 50 percent to 7,500 tons. This decision signals that its aramid business has recovered from the lawsuit with Dupont and is ready to tackle more aggressively. Demand is also rising from 5G optic cables and high-end tire cords, said analyst Baek Yeong-chan.
The expansion could contribute more to the whole company’s long-term profits. The aramid division will account for 6.5 percent by 2021, from last year’s 2.5 percent. It requires technology and long-term experience, and the expansion will promote the firm’s corporate value in the future, said the analyst recommending its stock as a “top pick” among small- to medium-sized chemical companies.
By Hwang You-mee (firstname.lastname@example.org)