Hyosung TNC, the fiber production unit of South Korean industrial giant Hyosung Group, said Wednesday it will invest 1 trillion won ($740 million) in Vietnam to establish a new spandex material plant.

Hyosung TNC secured approval for the investment from the Vietnamese government during a city development conference for Ba Ria-Vung Tau, a local province of the Southeast Asian country, held Saturday.

With the approval, the company will commence construction of a facility in Ba Ria-Vung Tau capable of producing 200,000 tons of butanediol annually, starting in the second half this year.

Butanediol is a crucial organic compound used in the production of polytetramethylene ether glycol, or PTMG, which is essential for making spandex fibers. It can also substitute for conventional fossil fuel-based materials, the company said.

Hyosung TNC expects that the demand for butanediol will increase in the eco-friendly materials market as its applications extend to various industries such as automobile interiors, packaging materials, footwear soles and industrial compounds.

Prior to this investment, Hyosung TNC had been operating two facilities in Vietnam: one for manufacturing PTMG and another for spandex. The new facility for butanediol production will complete Hyosung TNC’s vertical integration, covering all aspects of production from raw materials to fibers.

Last year, for the technology required to produce bio-butanediol Hyosung TNC partnered with Geno, a US-based bio firm specializing in using botanical resources for chemical materials.

The company plans to produce 50,000 tons of bio-butanediol annually and commence sales starting in 2026.

"The transition from conventional fossil-based materials to environmentally friendly alternatives in our bio business will be the cornerstone of Hyosung's operations for the next 100 years," said Hyosung Group Chair Cho Hyun-joon.

"We must bolster our presence in the global eco-friendly market, beginning with the implementation of a vertical integration production system for bio-butanediol and bio spandex."