Hyosung Advanced Materials Corp. is speeding up with expansion in carbon fiber business to ride on Korea’s heavy investment in hydrogen economy.

The carbon fiber production unit under South Korean conglomerate Hyosung Group announced Monday it entered a $139.2 million supply contract on high-strength carbon fiber with Hanwha Solutions Corp.

Under the contract, Hyosung Advanced Materials will supply carbon fiber for the next six years to reinforce hydrogen fuel tanks for vehicles.

Global demand for carbon fiber, one of core materials used in hydrogen fuel tanks, is estimated to grow from 19,000 tons this year to 832,000 tons by 2030, according to industry sources on Wednesday.

Hyosung Advanced Materials, which started carbon fiber development in 2008, began mass production in 2013 and launched own carbon fiber brand TANSOME. It is investing 1 trillion won ($894.5 million) to ramp up annual carbon fiber production capacity at the Jeonju plant to 24,000 tons by 2028.

As of Wednesday, Hyosung Advanced Materials shares have jumped more than 2.5-fold to 393,500 won since the beginning of the year.

Hyosung TNC Corp., a textile and trading firm under the group, also is building a spandex yarn factory with an output of 36,000 tons in Ningxia, China, spurring efforts to expand forays into the global spandex yarn market.

It plans to finish the construction within the year and aims to secure an output of 360,000 tons in the longer term.

Hyosung TNC shares have also gained more than two-fold to 585,000 won as of Wednesday since the beginning of the year.

By Lee Yoon-jae and Lee Ha-yeon

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