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Hansae Looks Ahead as it Marks 40-Year Milestone

2022 marks South Korean-based garment manufacturer Hansae’s 40-year anniversary. In its four decades, the producer has grown to be a global force in fashion, supplying some of the biggest retailers such as American Eagle Outfitters, Carhartt, Gap Inc., H&M, Target, and more. Hansae has a widespread presence; its production totals in relation to the U.S. population implies that one in three Americans wear Hansae-made clothing.

The company exported roughly 408 million pieces of clothing in 2021. To visualize this volume, if these garments were stacked, they would reach a height 3,736 times that of New York’s tallest building, One World Trade Center.

Since its founding in 1982, Hansae has expanded its global production map. Today, it encompasses 12 corporations that operate factories in Vietnam, Nicaragua, Guatemala, Indonesia, Myanmar, Haiti and the United States. Of the company’s 50,000 employees across the enterprise, 35,000 work in manufacturing.

The company continues to grow, both geographically and financially. It recently entered the 2 trillion won club in annual sales, a significant achievement for the corporation. Looking ahead to 2022, Hansae’s revenue increased 17 percent to $1.6 billion.

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While there are considerable achievements to look back on, Hansae is focused on the future. The company is investing in technology, sustainability and efficiency drivers that will propel it to its 100-year anniversary.

“We aim to have the company reach 100 years by discovering new growth engines with a creative and innovative corporate culture,” said Kim Ik Whan, vice chairman of Hansae.

Digitalization

Among Hansae’s technology initiatives is the recently adopted Hansae Advanced Management System (HAMS). This solution digitizes all Hansae’s production activity, enabling a real-time view of the status in its factories across Asia and the Western Hemisphere.

“We will increase work efficiency by utilizing advanced IT technologies and attempt to grow with fair evaluations that are performance-oriented,” said Kim.

Hansae specializes in original developing manufacturing, which means it designs, develops and produces apparel that is then marketed under the labels of its brand buyers. Its customers rely on Hansae’s creativity and trend knowledge to create products that are of the moment.

To streamline the creation process, designers in the company’s R&D centers in New York and Seoul have been leveraging 3D design technology to create samples. This not only shortens timelines, but it also allows for digital collaboration between Hansae and its international customers. An additional benefit of 3D design is waste reduction, since fewer samples are required before production runs.

“Hansae’s unique 3D technology can convey the texture, pattern and color of the genuine fabric as it is, making it as complex as the original sample,” stated Vice Chairman Kim. “We are investing continuously in the R&D center, and we will support for the development of virtual models.” By 2025, Hansae plans to replace more than 80 percent of physical samples with 3D samples.

Sustainability

Environmentally friendly practices are another investment area for Hansae. As the industry’s sustainability demands continue to grow, being able to deliver on these needs is a differentiator for the manufacturer.

Among Hansae’s sustainability initiatives is an alliance with Recover, a producer of circular cotton fibers. Hansae has also made an investment in Evrnu, the maker of post-consumer recycled performance fiber NuCycl.

Since it established sustainability targets in 2017, Hansae has made progress in reducing electricity, oil, coal and water use. It has also shrunk its greenhouse gas emissions, with a 21 percent deduction in 2020. Hansae has set a new 2029 greenhouse gas reduction target based on 2019 emissions and is striving to achieve it once again.

In 2019, Hansae launched its 10% for Good campaign, using its scale for the greater good. “Hansae donates and invests 10 percent of the net profit coming from clothing sales made with eco-friendly materials to organizations that conduct environmental movement activities,” said Kim. Among the organizations that have received donations is The Ocean Cleanup, a nonprofit targeting floating plastic waste.

Beyond doing good for the planet, sustainability is a growth strategy for Hansae. “Sustainability is concerned with the impact of present actions on societies, environments and ecosystems of the future,” said Kim. “These concerns should be reflected in the strategic planning of our company. And we believe we can expect sales growth and return on assets with sustainable actions.”

Automation

Vice Chairman Kim has also worked to build and develop a smart technique for increasing manufacturing efficiency. After seeing people doing manual labor for a long time, such as adding size labels, working on polybags and folding clothing, he identified tasks that might be automated by splitting the production process as much as possible. One of the most significant cases of Hansae’s machine is the development of an automated folding machine.

Kim was successful in developing a smart process unique to Hansae after actively collecting the ideas of field employees and engaging with smart factory specialists. Recently, in order to improve staff productivity, the company created the “R-bot,” a computer designed to replace simple repetitive chores. A chatbot technology is also employed to save time on repetitive incidents.

Many analysts have predicted that the garment industry will face difficulties next year. The consumer market, particularly in the clothing sector, is predicted to decrease dramatically as a result of the global economic recession. Despite these challenges, vice chairman Kim stated, “We will prepare new growth engines with an innovative corporate culture that actively utilizes IT technology in order to establish a virtuous cycle business structure of sustainable business models, digital-based supply chain establishment, vertical integration of production plants and business category expansion. We shall usher in the ‘Hansae 2.0’ era.”

To facilitate this Hansae 2.0 vision, the company has appointed former vice president Kim Kyung as its new CEO, succeeding Cho Hee-seon in the role. Kim Kyung will oversee Hansae’s efforts to vertically integrate operations in Central and South America, while CEO Kim Ik-hwan will lead the company’s strategies and investments.

The focus heading into the new year is on how Hansae, which had its best success ever in 2022, will use its strategy and performance to confront market challenges in 2023.

Click here to learn more about Hansae.