HS Hyosung Advanced Materials to Sell Tire Steel Cord Business for Future Growth
HS Hyosung Advanced Materials Corp., a South Korean leader in the advanced materials sector, is preparing to sell its tire steel cord business. The decision comes as part of the company’s strategy to reallocate resources toward high-growth industries such as electric vehicle materials, hydrogen, and artificial intelligence. According to industry sources, the company is expected to initiate a preliminary bidding process for the sale by the end of February 2025.
The tire steel cord business, which has been a core part of HS Hyosung's operations, is valued at approximately 1.5 trillion won (around $1 billion). In 2023, this segment generated sales revenue of 860 billion won (approximately $598 million) and earned 140 billion won in EBITDA, making it a significant contributor to the company's profitability. Notably, the tire steel cord division accounts for around 40% of Hyosung’s total profit.
What is Tire Steel Cord and Its Importance?
Tire steel cord is an essential material used in the production of tires. It provides reinforcement, improving the tire's durability, performance, and safety. The steel cord helps maintain the shape of the tire under the weight of the vehicle and absorbs shocks during driving, contributing to enhanced ride comfort. In addition to steel cord, Hyosung also produces nylon tire cord and polyester tire cord, making it the only company globally that manufactures all three major types of tire reinforcements.
Hyosung's tire steel cord division has a strong presence in key markets such as North America and Europe, where demand for high-quality tire materials remains robust. Despite this, the company has decided to focus on its core business of specialty fibers and other high-tech ventures, leading to the decision to sell the tire cord division.
The Strategic Shift: Focusing on Emerging Industries
The decision to divest the tire steel cord business aligns with the vision of Hyosung’s leadership, led by Vice Chairman Cho Hyun-sang. Cho, who took charge of the newly established HS Hyosung Group after it spun off from the larger Hyosung conglomerate in 2024, has articulated a clear strategy for the company's future. The new focus areas for HS Hyosung include developing materials for electric vehicles, hydrogen technologies, and artificial intelligence, industries that are expected to see significant growth in the coming years.
The sale of the tire steel cord business will provide Hyosung with the necessary capital to invest in these high-potential sectors. The company sees its future in the innovation-driven materials market, particularly as the automotive industry moves toward electric vehicles and other cutting-edge technologies. This transformation will help Hyosung remain competitive in the evolving global market while strengthening its position in the green and high-tech industries.
