Episode 57: Textile Machinery
One month later, in Lee Chang-jin’s office,
The heat of summer had subsided, and the season of autumn leaves beckoning had arrived.
Inside the now cool office, Yeo Jin-joo delivered a report.
“I have good news. The household vacuum dryer is almost in its final stages of completion. They’ve improved the sealing and stability, and it looks like we’ll be able to produce samples by next month.”
“That’s faster than expected. You’ve worked hard. Once the performance test is passed, make sure to give bonuses and annual leave.”
“Yes, should we ship the product immediately once it passes the performance test? If we book it by next month, it will take about 2 months.”
“It would take too long that way, so send it by air. We don’t know what might happen in between. Even if the transportation cost is high, it’s better to send the prototype quickly.”
“Understood. Oh, and the team that went for training at Clark will return next month.”
“How was the response to the training at Clark?”
“Overall, it was very positive. They adapted quickly, probably because they were experienced. They had already received basic training at Anyang Steel, so there were no issues in keeping up.”
“That’s encouraging. As soon as the first batch returns, send the next team immediately. Assign them to the departments they desire according to their performance.”
Having heard the news that Chang-sik was doing well a while back, Lee Chang-jin felt proud. Despite the distance, Lee Chang-jin always kept a close eye on the situation there. The fact that among the selected talents, some were achieving top-three results was enough to command respect.
“I heard the machinery parts production department is doing fine, and that concludes the morning production report?”
“Oh, there’s one more thing. It’s about tax issues. Recently, our sales have been rising sharply, and it’s becoming difficult to handle it with just a tax accountant. We need to find an accounting firm quickly to handle the taxes.”
“I know someone well in the accounting firm field, so I’ll look into it.”
Lee Chang-jin contacted Deputy Manager Jung Pil-joo at Mannheim to inquire about an accounting firm. Jung Pil-joo was puzzled.
“Aren’t you well-versed in accounting too? If necessary, you can leave it to the firm that has a business agreement with our company.”
“That’s true. But we’re not at that scale yet. Please introduce me to a firm that’s competent and has a good reputation. It would be great if they could also handle patent work.”
“Hmm, how about Yoram Accounting Firm? It’s a new firm, but its representative, Choi Tae-seop, is quite capable. He started the company after working as a tax officer at the National Tax Service, and it’s been doing very well recently. He has a wide network and is also in a partnership with Daehun.”
“Really? Then could you introduce me?”
Three days later, Lee Chang-jin, who had made contact, visited Yoram Accounting Firm.
The firm’s headquarters were only two blocks away from the Samilro Building where Lee Chang-jin used to work.
Choi Tae-seop, who had been waiting, guided him inside.
“Hello, nice to meet you. I am Accountant Choi Tae-seop.”
“I’m Lee Chang-jin from Daese Industries.”
“I often hear about you from Deputy Manager Jung. Wow, you look much better in person than in the newspapers.”
“Haha, you’re too kind. Thank you for saying so.”
Accountant Choi, who offered a handshake, personally pulled out a chair.
“Hmm, you said your industry is precision machinery, right? You’ve undertaken a lot of projects in just one year. I was surprised when I saw the documents in advance. Wow, I’ve never seen such a steeply rising graph of profit and sales.”
“Haha, it just turned out that way.”
“Well, you’ve come to the right place. Shall we get to the main topic? Before you came, I reviewed the materials to see if you could receive any tax exemptions. According to recent tax laws, you can apply for tax exemptions related to major industries and depreciation systems for manufacturing and construction machinery.”
“Is it difficult to receive tax benefits under the Small and Medium Business Act?”
“Normally, it would be possible, but in your case, it’s a bit special. The rate of sales increase is so high that it would be challenging to receive tax benefits.”
“That’s a pity. Then please explain the regulations you mentioned.”
“First, let’s look at the manufacturing tax exemption regulations. Depreciation applies to manufacturing machinery and equipment that operates for more than 16 hours a day on average. Cranes and forklifts used for construction can be considered heavy equipment for construction.”
“Operating for more than 16 hours a day, that’s quite tough.”
“Yes, it is. If that’s difficult, I recommend utilizing the facility investment tax exemption system under the Special Taxation Act. However, you cannot apply both tax exemptions and depreciation simultaneously.”
“I heard there’s also a system called the export loss reserve fund.”
“Yes. It’s a system where you can account for a reserve fund in advance to cover future costs, and it offers significant benefits. However, as I mentioned earlier, your current industry already has special regulations, so it would be difficult to receive benefits.”
“Then is there another way?”
“If you want to receive tax benefits, I recommend investing in a new business.”
“A new business? Specifically, what kind of business is advantageous for tax savings?”
“If you’re considering facility investment, I suggest looking into export-oriented businesses. Businesses focused on exporting silk or wool would be good examples.”
Lee Chang-jin nodded.
“Industries with high employment effects, right? What other industries offer significant tax reduction benefits?”
“Establishing a construction company or a trading company would also be good. Instead of paying taxes, reinvesting would be much more beneficial for you.”
‘To think I have to consider reinvesting because of taxes…’
Although there was much to ponder, it was overall a pleasant situation.
After finishing the consultation, Lee Chang-jin returned to the Yeongcheon plant just as he was changing into his work clothes.
His secretary, Yeo Jin-joo, knocked on the office door.
“What is it?”
“Sir, you have a guest. They’ve been waiting for 30 minutes.”
“Who is it? I don’t recall having any special appointments today.”
“They said they are from Hanseong Textile. They came on the recommendation of President Kim Cheol-ho from Guro.”
“Hanseong Textile? Isn’t that a textile company?”
“Yes, the president himself is here.”
Hanseong Textile was a prominent textile company in the 70s. In the late 70s, they achieved $100 million in exports and were considered a dark horse in the industry. But why would the president of such a company, whom he had no acquaintance with, come to see Lee Chang-jin? Curious, Lee Chang-jin nodded.
“Please let him in.”
The president of Hanseong Textile appeared to be a gentleman in his mid-50s.
He took off his fedora and bowed politely.
“Hello. I am Lee Man-soo from Hanseong Textile. I apologize for coming unannounced. It’s quite an urgent matter for me.”
“It’s fine. Please, have a seat.”
A moment later, Yeo Jin-joo brought out some warm chrysanthemum tea.
“Thank you. It smells wonderful.”
“So, what brings you here? As you know, our company is not involved in the textile industry.”
“Actually, I came to ask if you could repair a textile weaving machine. President Kim Cheol-ho from Guro recommended you.”
“Is that so? Although I’m an engineer, I’ve never worked on a weaving machine…”
“Yes, I understand. We recently purchased a new spinning frame, but it’s causing issues. We’ve asked several places, including the importer, for solutions, but we haven’t found a way to resolve it.”
He seemed quite desperate, judging by his tone.
“Could you tell me the details of the problem?”
“Recently, blended yarns have become more popular than nylon, so we boldly replaced our looms a few months ago. But ever since we replaced the looms, for some reason, pilling keeps occurring.”
Spinning refers to a stage in the cotton weaving process where the yarn, which has gone through carding and drawing, is extended and twisted to a certain thickness and then wound onto a bobbin. However, in the yarn winding process, pilling kept occurring, leading to a high defect rate. Listening to the story, Lee Chang-jin tilted his head.
“But isn’t it inevitable that some defects will occur?”
“You’re right, but the problem is that it’s not a normal amount. The loss rate is as high as 20%.”
“Could it be a manpower issue? Maybe the employees are too fatigued?”
“The issue is definitely not with the employees. We tried switching from two shifts to three shifts, but there was hardly any difference. Before replacing the looms, we operated with two shifts and had a loss rate below 7%.”
“A loss rate of 20% would make it inevitable to run at a loss. You must be very worried.”
“Yes, recently, the Ministry of Commerce called us in and gave us a hard time. They said if we don’t reduce the loss rate, our permit would be canceled. I’m very worried.”
“Have you filed a claim with the manufacturer?”
“Of course, but they haven’t responded. It seems they’re trying to evade responsibility. They told us to use traveler-specific oil or high-quality Japanese yarn. I’ve tried all of that, but the issue remains unresolved… We have no other options left.”
Having bought expensive machinery only to be unable to use it properly, one could understand his distress. As a fellow businessman, Lee Chang-jin could empathize with his desperate feelings.
“Alright. Show me the machine.”
Lee Chang-jin rolled up his sleeves immediately. He didn’t have a particular solution in mind, but he understood the desperation. Moreover, if President Kim Cheol-ho had sent him, he had to show some effort.
However, no matter how many times he checked, he couldn’t find any mechanical issues.
“Unfortunately, it doesn’t seem like there’s any problem with the functionality.”
“But there must be some issue causing the pilling. Please look at it one more time.”
“Then could you start it up and show me the operation? I need to see it in action to make a judgment.”
Following Lee Chang-jin’s instructions, Lee Man-soo turned on the power and restarted the spinning frame. As he carefully observed the machine spinning like a wheel, Lee Chang-jin suddenly had a curious thought.
“I’m not familiar with this field, but what usually causes pilling in the process?”
“It’s usually due to friction. Pilling occurs when the surface of the fibers clumps together like fluff due to friction.”
“Hmm… Friction, friction…”
At that moment, an ingenious idea flashed through Lee Chang-jin’s mind.
‘Could it be that the traveler size is too small?’
It was worth a shot. Lee Chang-jin decided to try out his idea immediately.
“Can the traveler be separated?”
“Yes.”
“Then let me take a look.”
Lee Chang-jin brought a steel rod of similar size to the separated traveler and examined it. After a few hours, Lee Chang-jin, who had drawn a rough sketch by eye, operated the CNC machine at the Yeongcheon plant.
Seeing a traveler being created right before his eyes, Lee Man-soo was amazed.
“Please wait a moment.”
The traveler Lee Chang-jin created was identical in structure except for being about 10mm larger in diameter. Lee Chang-jin replaced the traveler that winds the yarn with the slightly larger one.
When they spun the yarn again, unlike before, very little pilling occurred, and a continuous strand of quality mixed yarn was produced. Lee Man-soo’s eyes widened in astonishment at the different quality.
“Oh my, how did you do this?”
The unexpected result left President Lee Man-soo bewildered. Seeing his astonishment, Lee Chang-jin explained with a smile.
“Oh, it seems the traveler size wasn’t an exact fit with the machine. The friction during the production process caused this issue. Now that I’ve adjusted the ratio to ensure it’s not too tight, this problem shouldn’t occur again.”
The principle was very simple. The traveler operates not by itself but by the yarn wound around it.
The traveler’s rotation speed is proportional to the spindle’s rotation speed. The yarn is wound onto the bobbin due to the power from the speed difference between the spindle and the traveler. However, friction occurs between the traveler and the ring during this process.
What Lee Chang-jin did was a very simple component replacement. He adjusted the traveler’s size to reduce the friction between the ring and the traveler.
With reduced friction, the pilling naturally decreased significantly.
The ingenious solution amazed the president, who even clapped his knees in admiration.
“Thank you. I never thought it would be resolved so quickly.”
President Lee Man-soo repeatedly bowed, expressing his deep gratitude.
Feeling a bit embarrassed, Lee Chang-jin waved it off as if it was nothing.
“Oh, it wasn’t a difficult task. If you have any other products with similar issues, please bring them all here. Replacing the traveler is not a difficult task.”
While he made it seem like nothing, it was actually a significant event. It was a problem that experienced craftsmen had pondered for years without resolving, and he had solved it in just half a day.
“Understood. I’ll bring the rest immediately.”
President Lee Man-soo hurriedly rushed off, perhaps fearing a change of mind. Thanks to this, all the spinning frame issues at Hanseong Textile were resolved in less than a week.
Grateful for the help, President Lee Man-soo boasted about it like a heroic tale at every drinking party. The rumor spread quickly.
“Did you hear? The president of Daese Industries, they say he’s better than most textile machinery manufacturers or repair experts. If you have any troublesome machinery that needs repair, go see him right away.”
“I heard he graduated from Mannheim, and he’s reputed to be outstanding. Apparently, he graduated at the top of his class from Korea University Engineering School.”
“Really? Well, they say there’s no machine he can’t handle. Quite impressive for a young man.”
The rumors about Lee Chang-jin spread and became exaggerated among textile companies. At that time, the domestic textile industry’s localization rate was very low, so most of the machinery used for manufacturing was imported. Therefore, when imported machinery broke down, it was common for it to be left unattended due to a lack of spare parts or exorbitant repair costs.
But with the rumor that he could fix even foreign equipment, the response was overwhelmingly positive. Especially companies struggling to find parts flocked to him.
- To be continued in episode 58 -
