Sandwiched between low-cost China and high-tech Japan, South Korea's plastics industry faces challenges. But one mobile phone component maker thinks it has found a niche: It is focused on developing new technologies for painting and decorating.
Mirae Industry Co. Ltd., based in the industrial city of Changwon, has seen its sales grow from US$6.1 million in 1999 to US$65.2 million last year, as the country's mobile phone industry has taken off in the last decade. Korea is home to two of the world's five biggest mobile phone makers, Samsung and LG.
The privately owned molding, tooling and decorating company plans to open a facility in Bucheon, outside Seoul, in the second quarter. There Mirae will make specialized coatings for mobile phones, including using physical vapor deposition to make an easy cleaning coating that the firm says it has developed with a partner.
It's part of a concerted effort on technology research, including working with nanotechnology to develop scratch-resistant coatings, creating more environmentally friendly paints and developing its own product lines. These are businesses Mirae sees as having higher margins.
Company leaders say the firm needs that focus on technology to survive the global manufacturing changes that are posing problems for other, more traditional Korean plastics firms.
Innovations making ``easier-to-clean'' coatings may not be as sexy for consumers as, say, putting an MP3 player in a phone, but they represent potentially valuable offerings for mobile phone makers that want their models to stand out, said Mirae Vice President Vesa Kuismanen. He was interviewed March 28 at the company's headquarters.
The firm was founded in 1996 as a painting and printing house by Korean engineer Jeoung Jaehoon, who is still chief executive officer. In 2003, it added its own injection molding and tool building, in part to help it understand the key manufacturing processes for phones, he said.
Today it has 12 presses and can ramp up quickly with outsourcing, supplying insert molding, multishot and in-mold decoration. It also has about 30 toolmakers and builds injection molds for some of the world's biggest mobile phone makers and their suppliers, Kuismanen said.
But Kuismanen suggested the company's future is not tied too closely to being a plastics molding house.
``Plastics as an area is conventional technology. It is already something you can have in China or anywhere,'' said the Finnish national, who joined Mirae 18 months ago after time with mobile phone giant Nokia Oyj and a brief stint with Chinese phone maker BYD Electronic (International) Co. Ltd.
``Molding especially is that kind of a technology,'' he said.
The migration of traditional manufacturing is a challenge all Korean manufacturers have to deal with, he said. The country is now the 11th largest economy in the world but its rapid development means it can no longer call itself low-cost, he said.
``In terms of the high-volume, mass manufacturing, this kind of conventional technology is much cheaper in China and India and other places, so Korea is not cost competitive for the traditional technologies,'' he said. ``They face this kind of globalization. A lot of Korean companies have been struggling with this, in my opinion.''
Much of the technology development in the mobile phone industry does not come from the big phone makers, but from their smaller suppliers and from noncommercial researchers, he said.
``The real sources of the technology may be small and medium-sized companies, or noncommercialized institutes,'' he said. ``The small companies are focusing on certain areas, some specific, very small areas.''
While the company said sales have risen tenfold since 1999, it has sometimes stumbled. It opened a plastic painting factory in 2005 in Hungary, mainly to serve Nokia, one of its larger customers. But Mirae turned around and sold that plant earlier this year to BYD, after market changes put the facility at risk of being uncompetitive. It used the money for investments in Korea.
Mirae employs about 700 and has four facilities, including three in Changwon.
A tour through its main painting plant at times gives the feeling of walking through a NASA research lab, with class 5,000 clean rooms requiring compressed air showers to remove contaminants from clothing before entering, and a sophisticated five-layer automatic painting machine Mirae developed with one of its suppliers.
As part of the firm's push to stay competitive, that machine dramatically reduces labor costs and can do with one worker what a traditional decorating line does with 10, said M.J. Song, director of key account management.
``Painting is our DNA,'' Song said.