It will act as an export base for North America and the Middle East, as well as a regional business hub for emerging Asian markets.
“This year, we have seen incredible growth and increased demand for our high quality tires in the U.S. market,” says Soo Il Lee, president of Hankook Tire America Corp. “The additional production capacity that the new Indonesia plant is going to provide will mean greater tire availability, increased sales and market share and continued positive growth for us in the United States.”
The company posted a first quarter sales increase of more than 26 percent from 2010’s first quarter figures. It has targeted more than $1 billion in U.S. sales for this year.
The choice of Indonesia “is a promising plant location” as it is one of the main rubber producers in the world with a total production of 2.92 million tons in 2010, according to Lee.
“Tire demand and production in Indonesia continues to soar,” he reports, with Indonesia, Thailand, Malaysia and Vietnam collectively supplying 95 percent of the world’s rubber. In 2010, Indonesia’s tire exports increased by 25 percent over 2009; tire sales rose 23 percent. Hankook’s’s investment in Indonesia is expected to grow the country’s national tire industry by 10 percent to 15 percent.
Initial production capacity of the new plant will be about 6 million tires per year. It will employ some 1,400 workers by 2014 and is expected to add 2,800 additional jobs by 2018.
More than half of the output will be dedicated to the U.S. market. Hankook’s projected 2011 worldwide production capacity is estimated at more than 89 million tires, with its annual global production capability expected to reach 100 million units by 2014, Lee says.
In May the company broke ground on its third plant in China, encompassing more than 5.7 million square feet. It will start operations by August of 2012, amounting to a $954 million investment to produce truck, bus and car tires. Completion is anticipated by the end of 2015 with a production capacity of 11.5 million tires per year; 1.6 million of them will be truck and bus tires.
Hankook’s investment in the new factories is part of its goal to produce 100 million tires a year by 2014 and become the world’s fifth-largest tire company, according to Lee.
For more information, visit www.hankooktireusa.com.
