Hankook breaks ground on Indonesia tyre plant

ERJ staff report (TB)

Bekasi, Indonesia -- Hankook Tire Co. Ltd. has broken ground on a $353 million tyre plant in Bekasi, which the firm said will act as an export base for the North America and Middle East markets, as well as a regional business hub for emerging Asian markets.

The 6.4 million-sq.-ft. factory, in Lippo Cikarang, Bekasi, West Java, is Hankook's seventh tyre plant and will comprise four major production facilities. During the first phase of development, Hankook said it anticipates initial capacity of approximately 6 million tyres per year, with more than half of that capacity dedicated to the US market.

The new plant will employ approximately 1,400 by 2014 and is expected to add 2,800 additional jobs by 2018. Hankook said its projected 2011 global production capacity is estimated to total more than 89 million tyres, and annual global production capability is expected to reach 100 million units by 2014.

“This year, we have seen incredible growth and increased demand for our high quality tyres in the US market,” said Soo Il Lee, president of Wayne, N.J.-based Hankook Tire America Corp. “The additional production capacity that the new Indonesia plant is going to provide will mean greater tyre availability, increased sales and market share and continued positive growth for us in the United States.”

Hankook Tire Co. Ltd. posted a first-quarter increase in sales of more than 26 percent from 2010. The company also is targeting sales of more than $1 billion for the US market this year.

The tyre maker said it chose Indonesia for a plant because the country is one of the main natural rubber producers in the world, with production of 2.92 million tons in 2010 alone. Indonesia, Thailand, Malaysia and Vietnam collectively supply 95 percent of the world's natural rubber.

In 2010 Indonesia's tyre exports jumped 25 percent over 2009, and tyre sales rose 23 percent.

Hankook's investment in Indonesia is expected to expand the country's national tyre industry by 10 to 15 percent, according to the Indonesian Tire Manufacturers Association.

The groundbreaking in Indonesia follows Hankook's May 18 groundbreaking ceremony at its plant in Yufu Industrial park of Chongqing Liangjiang New Area in China.

The $954 million China plant, encompassing more than 5.7 million square feet, will be Hankook's third plant in that country and sixth globally. It is expected to start operation by August 2012 and will produce passenger, truck and bus tyres.

The China plant will be completed by year-end 2015 and will have a capacity of 4,500 radial truck/bus and 30,000 passenger tyres per day, according to Hankook, or annual capacity of 11.5 million passenger and 1.6 million TBR units.

Hankook said its investment in new production is part of its commitment to produce 100 million tyres a year by 2014 and become the world's fifth largest tyre company.

From Tire Business (A Crain publication)

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