TK Chemical Corp., the spandex-making affiliate of South Korea’s shipping-to-construction company SM Group, said on Wednesday it will build a spandex plant in Iran to gain a bigger share there and expand across other Middle Eastern markets.
TK Chemical, which already operates in Iran, now sees bigger opportunities as the UN nuclear agency lifted the years-long economic sanctions against Iran earlier this year, paving the way for multinational firms to rebuild their businesses there, Yonhap news agency reported. South Korea’s biggest spandex manufacturer plans to initially inject $69 million to build a 10,000-ton-a-year spandex facility in Iran with the aim of starting production in 2019, a company spokesman said.
“The annual capacity in Iran will be expanded to 30,000 tons in the long term,” he said, without giving a timeframe. Domestically, it will have an output capacity of 33,000 tons a year from June this year.
“We will partner with local companies to set up a joint venture in Iran to proceed with the project. The products manufactured in Iran will be sold locally and in other Middle Eastern countries,” said the spokesman. “We are currently in talks with local investors to decide on overall investment size and each ownership stake.”
TK Chemical entered the Iranian market in 2001, with its spandex fiber exports to the country jumping to 2,800 tons worth $17 million in 2015 from 150 tons in the first year. Under its wing, SM Group has affiliates such as shipping line SM KLC, SPP Shipbuilding and TK Chemical, which claims a share of 81% in Iran’s $21 million spandex market.
