The nation’s largest conglomerate Samsung is to enter the fast-growing carbon fiber market by establishing a joint venture firm with one of the world’s most renowned manufacturers of carbon-based products.

Samsung Petrochemical, the chemical subsidiary of Samsung Group, signed a contract with Germany-based carbon company SGL Group on Thursday to kick off a marketing and sales joint venture under the name “Samsung SGL Carbon Composite Materials.”

The primary objective of the cooperation is to develop new industrial and electronic applications with carbon composite materials for Samsung and the Korean market, according to officials.

“Samsung has long been looking for a partner with capacities in carbon fiber and related composite products,” said Juergen Koehler, a member of SGL’s board of management.

“Our forte is that we are able to tailor-make carbon-based items for our customers as we have control over the entire value chain for carbon fiber, starting from raw material supply to synthetic resin processes.”

Carbon fiber, 10 times stronger and five times lighter than steel, is considered one of the most lucrative industrial materials and is expected to replace conventional metal in several key businesses such as automobiles, aerospace and leisure sports.

The current size of the world carbon fiber market is some 47,000 tons, which is visibly smaller than the aluminum or steel market, but the volume is expected to range between 100,000 tons and 150,000 tons by 2020, the official said.

“Lightweight materials are rising as a key factor not only in industrial applications but also in the end-consumer market such as digital media, an area which Samsung is renowned for,” Koehler said.

The two partners chose to adopt a joint venture format in an aim to maximize their advantages, he explained.

“Samsung is strong in local resources and product planning, whereas SGL’s capacity is focused on material development,” he said.

“Through this joint venture frame, we may maximize the sales and marketing efficiency and also keep a closer relationship with Samsung.”

The partnership will largely act as a litmus test for the future of Korea’s carbon fiber market, the official said.

“If our business output turns out to be successful, it will send out a positive signal to the entire industry here,” Koehler said.

For example, the use of carbon fiber in the automobile sector is yet limited to high-priced racing cars but top carmakers such as Hyundai Motor, too, may take an interest, depending on Samsung’s performance, he said.

“Carbon fiber is still in its early stage of commercialization but will eventually find its position in the market,” Koehler said.

“It will gradually replace aluminum and steel in specific industries and items, but will form an intelligent material mix, without completely shoving out conventional materials.”

By Bae Hyun-jung (tellme@heraldcorp.com)