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(Yonhap Interview) Alcantara in talks with Hyundai over Genesis models

Interviews 13:00 December 14, 2019

By Choi Kyong-ae

SEOUL, Dec. 14 (Yonhap) -- Alcantara S.p.A., maker of an upmarket suede alternative of the same name, is in talks with South Korea's Hyundai Motor Group to supply its synthetic fabric for vehicles from Hyundai's independent Genesis brand, the company's chairman has said.

"We cannot share the specific name of the (Genesis) models in advance, but we are currently discussing the opportunities with (Hyundai Motor Group)," Alcantara Chairman and Chief Executive Andrea Boragno told Yonhap News Agency in an email interview.

Hyundai Motor Group confirmed it is in talks with multiple companies, including Alcantara, on the supply of high-end materials for Genesis models.

"But the company has not signed a supply deal with Alcantara," a company official told Yonhap.

The Genesis lineup consists of the G70, G80 and G90 sedans; the GV80 sport utility vehicle is expected to be added early next year.

This file photo taken provided by Alcantara shows the company's Chairman and Chief Executive Andrea Boragno. (PHOTO NOT FOR SALE) (Yonhap)

Alcantara began its partnership with the Korean automotive group in 2007 by providing its synthetic suede for Hyundai Motor Co.'s Equus flagship sedan, which is now the G90 after a full-scale makeover.

In May last year, it started supplying Alcantara for Kia Motors Corp.'s Stinger sports car as well as for 600 limited editions of Hyundai Motor's "i30 N Project C" hot hatch model introduced at the 2019 Frankfurt Motor Show in September.

The Milan-based company, established in 1972, said it plans to provide its leather alternative for Hyundai Motor's Veloster N high-performance model in 2020.

"We will continue to provide Alcantara to Hyundai Motor Group next year and have been discussing with not just Samsung Electronics but some other large Korean corporations as well," the chairman said without elaborating on who they might be.

Alcantara's classy, soft-to-the-touch faux suede was also used in covers for Samsung Electronics' Galaxy S8 and S9 smartphones.

Automakers increasingly want to use Alcantara's material to spruce up interiors and shed weight. It has become common to see car models with Alcantara-covered seats, dashboards, headliners and steering wheels.

"Even in upgraded trim levels in mid-market cars, there is quite a tendency to improve the quality of the interiors," Boragno said.

Nearly 80 percent of Alcantara sales in terms of volume are auto-related. But the material is gradually finding its way into planes, luxury yachts, fashion and even consumer electronics, according to the chairman.

The company currently produces about 8 million square meters of its material per year. As demand in the United States and Chinese markets continues to drive sales, it plans to invest 132 billion won (US$117 million) to increase production by 70 percent over the next five years.

Alcantara does not have a manufacturing facility outside Italy.

Asked about the possibility of building a plant in emerging markets to take advantage of low labor costs, the 68-year-old Italian native averred the company does not have such a plan.

"Despite the high production costs, Made in Italy which is recognized for fine goods by the global markets is one of our crucial identities and it has become our core strength in the global markets," he said.

Alcantara has a number of merits over real suede. Alcantara is 50 percent lighter than leather and more durable. Among other things, the process for making it is environmentally sustainable.

Alcantara earned carbon neutral certification in 2009, becoming the first Italian company to do so. It has begun introducing renewables into its supply chain and aims to churn out a 100 percent bio-based product by 2020.

Alcantara posted sales of 200 million euros (US$220 million) in the fiscal year ending in April this year, up 1.5 percent from 197 million euros a year earlier.

Europe accounts for 64 percent of Alcantara's global sales, while the Asia Pacific region and other emerging markets make up 30 percent and the U.S. 6 percent.

Toray Industries, which produces synthetic suede branded as Ultrasuede in Japan, owns a 70 percent stake in Alcantara and Mitsui & Co. holds the remaining 30 percent.

This file photo shows the interior of the Kia Stinger. Alcantara is used in the sports car's dashboard. (Yonhap)

kyongae.choi@yna.co.kr
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