[THE INVESTOR] Hyosung Group -- led by Chairman Cho Seok-rae -- has suspended operations of a plant producing polyketone, an eco-friendly thermoplastic material that the Korean company was the first to develop and commercialize.

The main reason is the lack of demand, according to industry sources on Aug. 24.

“Demand is low, and our inventory is overflowing. We will consider whether to restart the plant in the third or fourth quarters,” said one Hyosung employee on the condition of anonymity. 

Firms are currently not too eager to take on the risk of replacing existing materials, meaning it would take more time than expected for polyketone to take off. Hyosung had earlier expected to earn up to 10 trillion won of added value by 2020 from the development of the new material.

Hyosung completed the polyketone plant with the capacity of producing an annual 1,000 tons in 2013. It invested an additional 125 billion won (US$111.7 million) in 2014 to increase production to 50,000 tons a year.

Hyosung has worked on the material for a decade, investing 50 billion won in research and development alone. In 2010, polyketone development was selected as one of the top government projects by the Trade Ministry.

Despite the recent setbacks, polyketone has widely been cited as the “next big thing” in engineering plastics that will eventually replace nylon or more typical plastics. In 2015, the engineering plastic market was worth 66 trillion won. It is expected to grow 5 percent annually to reach 80 trillion won by 2020.

By Kim Ji-hyun (jemmie@heraldcorp.com)