Jungwoo Group

Celebrating the 44th anniversary of its foundation, Guatemala's 2nd plant is in full production this year, operating seven operations in three countries, the world's largest knitted production, and securing more wage-raising manpower than overseas factory tariffs

Fashion Journal & Textile Life: Reporter Cho Young-joon] Jungwoo Textile Co., Ltd. and Jungwoo Vinaya Co., Ltd. will mark the 44th anniversary of their foundation on May 10. Jungwoo Textile Co., Ltd., which started as a small knitted factory in Seongsu-dong in 1982, has grown into the world's largest knitted fabric manufacturer (based on a single factory) by operating seven operations in Korea and two overseas locations (Guatemala and Vietnam). Jungwoo Textile's growth reflects the entrepreneurial spirit of the founder of the company, Oh Byung-chul, and his strong commitment to the textile industry. He met Chairman Oh Byung-chul at the headquarters in Seongsu-dong, where Jungwoo Textile was born. 

Chairman Oh Byung-chul of Jungwoo Textile to explain the current state of the company

 

■ Congratulations on your 44th anniversary. Jungwoo Textile and Jungwoo Vina are celebrating their 44th anniversary, but you've been working in the textile industry before that. You've been with the textile industry all your life, right?

 

-Before the 1970s, most large Korean companies entered the textile business and laid the foundation, and around that time, I was living in a textile company.

Many of the founders of successful band companies, woven fabrics, and dyeing companies were engaged in textile factories and trade lines at that time. 

As we moved into the '70s and '80s, when large corporations were pulling out of the textile industry, they actively encouraged textile workers to become independent.

And a lot of our employees came out of factories and businesses, and those who didn't have the money set up Bend, Textile, and those who had the money set up dyeing companies, and I'm one of them. 

 

What started with a few knitting machines now has two companies and seven operations in three countries. 

 

Jungwoo Vina was born as a trading company specializing in fabric exports in line with the establishment of a Vietnamese knitting plant in 2005, but the birthplace was set as the foundation day in 1982 because Jungwoo Textile continued. 

 

■ Are you curious about the status of Jungwoo Textile and Jungwoo Vina's workplace?

 

-Jungwoo Textile and Jungwoo Vina play specialized roles in each of the three bases of Korea, Vietnam, and Guatemala, and operate organically with each other.

 

Jungwoo Textile, which is centered on knitting, is mainly operated by Vietnam's 1st plant, Guatemala's 1.2th plant, and the Korean plant (Hwado-eup, Namyangju), while Jungwoo Vina is led by Vietnam's 2nd plant vertical plant.

 

In the case of Jungwoo Textile Namyangju Hwado Plant, it serves as a small-scale production base for various types that can produce 1 million pounds per month, focusing on small-scale production and R&D centered on jacart. 

 

We are leading the development of fabrics of various organizations and materials by digesting various knit organizations including single and double jacquard. 

 

Jung Woo-bi or Vietnam's second plant has a vertical integrated production system that can handle the entire process from knitting, dyeing, printing, and post-processing in one place, and its strengths are not only production efficiency, but also competitive unit prices and fast lead time.

 

The knitting division has a production capacity of 11 million pounds per month and 200,000 kg per day, while the dyeing division has a production capacity of about 7 million pounds and 120,000 kg per day, making it the world's largest single plant to produce knitted fabrics.

The print division has a production capacity of 3 million yards per month, while the post-processing (Tenta, Brush, Dumble, Compac, etc.) division boasts a production capa worth about 5.5 million pounds.

 

Jungwoo Textile Guatemala Plant 1 has a knitted production capacity of 3.3 million pounds per month, and its advantage is that it uses CAFTA Yarn.

Chairman Oh Byung-chul Explains Chung Woo-fiber's Second Plant in Guatemala

■ You're still running a factory in Korea.

 

-Not all went abroad. There is a knitting factory in Hwado-eup, Namyangju, Gyeonggi-do. It is Jungwoo Textile's parent factory, and about 30 workers work. 

About 50 jacquard-centered knitting machines are still in operation, and about 100 knitting machines are still in use in warehouses. 

It only produces knitted fabrics, but considering various costs such as labor costs, it is not economical, but it is a symbolic factory, so it continues to operate. 

 

■ The U.S. Trump administration's recent tariff bomb has disrupted the world. What countermeasures should domestic companies with production bases abroad take?

 

-The U.S. tariff bomb is not a big deal.

We have production bases in Vietnam and Guatemala, and in Vietnam, the U.S. hit 46%, but it hit neighboring countries (southeast Asian countries) on a similar scale, so I don't think it's affected much.

Guatemala is only subject to 10% tariffs and can enjoy free trade benefits with the United States based on the CAFTA agreement, so there will be no problems. 

 

Vietnam is also negotiating with the United States during the grace period, so we expect it to be resolved smoothly. 

 

In the case of these overseas production bases, the bigger problem is not tariffs, but strengthening regulations due to local manpower supply and changes in various systems.

In Vietnam, labor costs are rising sharply, and the avoidance of textile workplaces is spreading like Korea due to economic development. 

 

When we first entered Vietnam, textile businesses were popular, but since then, wages have risen as industries such as electronics and automobiles have entered the market, and textile and clothing industries are turning into unpopular businesses, so securing manpower is a big concern. 

 

In Vietnam, Samsung Electronics has entered the industry, and textile and clothing factories are having a hard time securing manpower because workers are trying to go to the electronics sector more. 

 

Therefore, Korean companies that have entered overseas will have to make all-out efforts to secure manpower, although tariffs are also tariffs.

Jungwoo Textile Guatemala's 2nd plant location (above), civil engineering, construction, etc. progress (below)

 

■ What is the level of labor costs for workers in Guatemala and Vietnam?

 

-Guatemala is also seeing its workers' wages rise every year, but it is not as steep as Vietnam, so Vietnam is expected to overtake Guatemala soon.

If this happens, Guatemala, which is geographically close to the U.S. market, will be more advantageous.

 

■ If wages go up like this, maybe we should move somewhere else. Are we looking at other third areas as well?

 

-I don't think I'm leaving Vietnam yet. Since our industry is a business that requires facility investment, it's not an industry that can easily move to a region, and if it's a third region, it's Africa, but we're not in the stage to review it yet because we don't have the infrastructure. 

 

■ I'm pushing for a second factory in Guatemala, how much is it now?

 

-Jungwoo Textile Guatemala's second plant is located near Guatemala City and is currently building a vertical plant (weaving, dyeing vertical integration plant) on a site of about 265,000 square meters (85,000 pyeong). After completing the civil engineering work, the plant will be built and manufactured in earnest in the fourth quarter of this year. 

 

The second plant's investment plan is being divided into two stages, which will be equipped with facilities that can produce 5.5 million pounds of knitting and 2.2 million pounds of dyeing per month. 

 

Once the first facility operation is stably completed, the second phase of facility investment will be carried out, with the total knitted production scale expanding to 7.2 million pounds and dyeing to 4 million pounds when the second phase is completed in 2027. 

 

Guatemala has the geographical advantage of being able to deliver quickly to the U.S. market, enabling efficient logistics for the North American market.

 

The CAFTA (Carfta) agreement allows you to enjoy free trade benefits with the United States, which minimizes the burden of tariffs when supplying products, which is a major strength in your supply strategy targeting the North American market. 

 

When the entire setup of Guatemala's second plant is completed in the future, we expect to further strengthen our responsiveness to North American demand.

My push for the second plant in Guatemala from 2022 is for future generations.

 

After entering Guatemala in 2004, I ran a knitting factory (first plant) for more than 20 years and thought about it, and the amount I've paid for rent alone was enormous. 

 

In addition, the rising land prices are likely to push up rents in the future, and I wondered what future generations could do in Guatemala if they didn't have land. 

 

I thought that if we had land, our long-term employees would be able to continue to create food here after retirement. 

 

Looking at the rise and fall of Korea's textile industry, I thought that Vietnam is a communist country, so it is impossible to hold private property, and Guatemala is possible, so let's invest for future generations.

 

Chairman Oh Byung-chul Reflects on Half-Century of Korean Textile Industry

 

■ Jungwoo Textile and Jungwoo Vina are meeting quality and sustainability standards through various global certifications.

 

-We have a number of eco-friendly certifications that meet international standards.

It has a number of eco-friendly certificates such as OEKO TEX, GRS, OCS, GREEN TEX, and HIGHG FEM, which are eco-friendly throughout the process and prove that no hazardous substances are used. 

 

In addition, we meet customer needs for SUSTAINABLE fabric such as recycled fabric and ORGANIC, which are trend these days. Through this certification, we can give you trust as a sustainable production partner, not just making it. 

We also have our own test lab certification.

 

Jungwoo Vina operates an internal test lab in its factory in Vietnam and also has a test system that is officially certified by major global brands.

VS&CO, GAP, TARGET, KOHL'S, and W-MART can conduct their own tests through official certification, enabling fast and efficient progress. 

It can be a great strength in the recent trend of all buyers aiming for speed models and demanding fast delivery. This enables rapid market response and efficient quality control, enabling quick customer response.

It also has a color certification system, and color matching accuracy is a very sensitive part for brands. Jungwoo Vina is building a digital color system that can cope with it.

X-RITE / DATA COLOR / NATIFIC All three systems ensure accurate color matching and consistent quality to meet the color standards required by global brands.  

 

■ What are the main customers?

 

-Currently, we have global brands such as Walmart, Victoria's Secret, Target, Carter's, Kohl's, etc. because we have stable quality, lead time, and solid technology reliability.

Jungwoo Textile, Jungwoo Bina Seongsu-dong Company View

 

■ In the meantime, the domestic textile industry has experienced many ups and downs. Why was Jungwoo Textile able to continue to grow?

 

-Looking back, I think Korea's textile industry went through a great ordeal when large corporations turned a blind eye to the textile industry. Government officials' theory of textile specifications also played a part. 

As the textile industry in Korea weakened, most of the agents moved to Hong Kong and China. A large number of domestic workers who used to work for agents also became unemployed. 

There will be no end to the ups and downs of the Korean textile industry. It's a relief that I survived this and that ups and downs without dying.

 

Jungwoo Textile's ability to win the global competition must have been through rapid information, high quality, reasonable price, compliance with delivery date, and ERP system construction.

In addition, it is thanks to the efforts of all executives and employees, including CEO Lee Bok-hwa, day and night. 

 

■ You've been suffering from illness for a while, how are you now?

 

-DEAR ABBY: I have recently been dealing with two cancers and have suffered greatly in my mind and body. Luckily, I was able to come back to work because of the lack of metastasis. I feel like I'm a newborn.

 

■ Since a few years ago, he has donated money to the Seomsanryeon Scholarship Fund, the Seomsu Cooperative Development Fund, and the Children's Heart Foundation, and recently, the cost of supporting the recovery of forest fire damage has been greatly improved.

 

-My philosophy is that we should share and live together. In the future, we will continue to make more efforts to become a company that actively practices ESG management.

 

(Fashion Journal & Textile Life ⓒ okfashion.co.kr )