AlliedSignal Details Its Polyester Venture In Korea

In an exclusive interview with Chemical Online, two of the managers of Allied-Signal's Performance Fibers Div. detailed their recently announced business plans in Asia. In late October, Allied-Signal announced that it would join with Kohap Ltd., S.K. Chemicals Ltd. and Sam Yang Corp., all South Korean companies, to form an Asian Performance Fibers company.

The new company will market the high-tenacity performance fibers produced by all four companies in the South East Asian area. The four companies will continue to own and operate their facilities to manufacture the range of products. Technology to modify and expand the product range will be supplied by AlliedSignal, who will have 51% ownership in the new company.

Fred Festa, vice president of Performance Fibers, says that the action is the latest step in a process that started in January, when the Performance Fibers Div. was formed from several fiber-related businesses of AllliedSignal. The company will add approximately $100 million to the $600-million revenue that the division will record this year. "We want to be a global supplier, and since many of our customers have operations in Asia, it makes sense for us to strengthen our base there."

Festa also says that the move is a vote of confidence for the future economic health of the Asian region. "The Asian financial crisis clearly opens up opportunities for us—there's a smaller 'entry fee.' But while many companies are backing away from Asia right now, we still believe that the growth rate in Asia over the next 10 years will be higher than in the U.S." (Click here to see the recent SRI study indicating the brighter outlook for Asian petrochemical investment.)

A somewhat unusual aspect of the venture is that AlliedSignal is not taking control of any of the Korean companies, or their plants. AlliedSignal will employ 30-40 people in a marketing company, and will add technology assets.

Among the Korean companies, Sam Yang Corp. will have the majority share. In-Seok Koh, executive VP of Sam Yang, emphasizes the improved R&D capabilities: "The combined R&D capabilities of the four companies will insure we are leading the race to provide our customers innovative technical solutions."

Harvey Rowan, a business development manager for Performance Fibers, notes that the three Korean companies, combined with joint-venture activities of AlliedSignal in Korea, will offer 44,000 m.t./yr of capacity in polyester. "All these plants are of relatively recent vintage," he says. "We will consider expansion as the market dictates."

The Performance Fibers Div. of AlliedSignal sells nylon, polyester and ultrahigh-molecular-weight polyethylene. End uses include cordage, industrial broad wovens and narrow fabrics, mechanical rubber goods and tire reinforcements.

For more information: AlliedSignal Performance Fibers, POB 31, St. Petersburg, VA 23804, USA. Telephone: 800-695-5969. Fax: 914-331-1431.