Hansae: How Hansae is Strategizing for Nearshoring's Rise and Sustainability Needs

In This Article: South Korea-based manufacturer Hansae Co., Ltd. is setting itself up to meet the fashion industry's future demands with investments in Western Hemisphere production and sustainable innovation. Hansae's investor relations presentation on Oct. 16, 2024 in Ho Chi Minh City, Vietnam-hosted alongside its parent company Hansae Yes24 Holdings-delved into some of the manufacturer's recent successes and its strategy moving forward. The company, which produces roughly 400 million garments annually in factories across seven countries, has achieved financial growth through strategic moves centered on better serving its large U.S. customer base and growing European and Japanese clientele. More from Sourcing Journal As Hansae showcased at its IR event, one of its main focus areas in recent years has been growing its production footprint in the Americas. It recently established an El Salvador corporation, which is targeted to begin operations in the first quarter of 2025. Hansae is also enhancing its capabilities through vertical acquisitions, openings and partnerships. Its yarn manufacturer EcoSpin in Guatemala is slated to start production in the fourth quarter of next year. Meanwhile, Hansae's fabric manufacture r subsidiary C&T is opening its third factory in Vietnam, and operations are expected to start in Q1. The C&T facility is equipped with lower eco impact biomass boilers and high-tech machines from European makers. Also, Hansae is aiming to open its newest 'Made in USA' investment, a synthetic fiber mill , by the first quarter. "Hansae will continue expanding strategic assets in both the Western and Eastern Hemispheres," said Daymond Kim, vice chairman of Hansae Co., Ltd. "Sustainable and prolonged growth is the priority of such expansion." Another aspect of Hansae's investments is sustainable production. Working toward the goal of carbon neutrality by 2050, the company has installed solar panels at its overseas factories, adopted biomass as a fuel source and is purchasing renewable energy certificates (RECs). Zooming in on two of its facilities, Hansae's plants in Myanmar and Nicaragua are now both getting 23 percent of their energy consumption from eco-friendly sources. Hansae's facility in Nicaragua uses energy from solar panels. At a product level, Hansae has linked up with fiber recycling firms to drive circular fashion systems forward, and it is increasing its use of organic materials. It has also reduced physical sampling through 3D tools, thereby shrinking material wastage. Rounding out the company's ESG approach is a commitment to employee diversity and inclusivity. Hansae provides its workforce with growth and development opportunities, including training, so they can advance their careers. These efforts were recognized by the 2024 K-ESG Management Awards, hosted by Korean daily newspaper Dong-A Ilbo, which honored Korean entities in the public and private sector with exemplary ESG practices and culture. 2024 marked the second year in a row that Hansae received the grand prize at the awards. "The award honors Hansae's efforts on ESG commitments, again in 2024 as well," said Kim. "Hansae will continue to invest for a sustainable future by achieving carbon neutrality targets and cooperating with local communities where our overseas corporations stand." Leading all these efforts is Kim, who has been at Hansae since 2004 and became vice chairman and CEO in 2017. During his tenure, he has expanded Hansae's global presence and built strong partnerships with brand customers around the globe. Kim's leadership earned him a spot in the Economist Korea's list of the 100 best CEOs in the nation. He was chosen from a pool of 5,000 company leaders, placing him in the top 0.2 percent. Some of the factors that pushed Kim to the top were Hansae's investments in robotics and manufacturing automation and the company's growth and profitability. Under Kim's leadership, in the 2022 fiscal year, Hansae reached and exceeded the sales milestone of 2.2 trillion won (just around $1.6 billion in current exchange), with a net profit of almost 85.6 billion won. As of 2023, sales were 1.7 trillion won (roughly $1.2 billion), with a net profit of almost 112 billion won, or $74.6 million. A publicly traded company, Hansae has also joined the Korean Value-Up Index, which lists the top 100 industry leading companies traded on the Korean Stock Exchange Market. To further this growth trajectory, Hansae will continue its strategy of advancing technology in manufacturing, moving production closer to its main market of the U.S. and leading the charge for sustainability. "It is true that the global economy and fashion industry are experiencing a turbulent time" said Kim. "Hansae will continue to pioneer sustainability within fashion supply chain, as well as growing profitability, efficiency, predictability of manufacture by automated systems." Click here to learn more about Hansae.