Nexen to build 2nd plant in South Korea

ERJ staff report (TB)

Seoul, Korea -- Nexen Tire Corp. will invest $843 million (Euro 577) over eight years in a passenger and light truck tyre plant in South Korea to meet growing demand for fuel-efficient tyres.

The factory, to be located in Gyeongnam Province southeast of Seoul, will be engineered to turn out 30 million units a year, making it the world's largest tyre plant of its kind, Nexen said in a filing with the Korea Exchange.

Reports from South Korea cited the filing as saying the decision reflects the recent US decision to impose steep duties on tyres from China, where Nexen opened a factory two years ago. That plant, in Qingdao, was set up in part to supply US customers.

A Nexen Tire spokesman said adding a plant has been under consideration for some time. Nexen's existing South Korean tyre plant in Yangsan is also in Gyeongnam Province.

Nexen did not say when it expects to break ground or when tyre production should start.

With 2008 tyre sales of $877.3 million, Nexen is considered the world's No. 24 tire maker, according to ERJ's annual analysis of the global marketplace.

From Tire Business (A Crain publication)