Hankook Tire on Thursday, June 9, announced details of its new plant in Lippo Cikarang, Bekasi, West Java, Indonesia, and celebrated its position as one of the fastest-growing tire companies in the world with a groundbreaking ceremony for its seventh production plant.
The plant, comprised of four major production facilities covering 6.4 million square feet, 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.
During the first phase of development, Hankook Tire will invest $353 million with initial production capacity of about 6 million tires per year. The new plant will employ about 1,400 workers by 2014 and is expected to add 2,800 additional jobs by 2018.
Hankook Tire’s strategic investment in Indonesia aims to accommodate the growing demand for its high-quality tires, particularly in the United States with more than 50 percent of the plant’s production dedicated to the U.S. market. Hankook’s projected 2011 worldwide production capacity is estimated to total more than 89 million tires, with its annual global production capability expected to reach 100 million units by 2014.
“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.”
Hankook Tire America Corp. recently posted a first-quarter 2011 increase in sales of more than 26 percent from the first quarter of 2010, after seeing overall U.S. sales climb 21 percent for all of 2010. Additionally, Hankook Tire America Corp. is targeting sales of more than $1 billion for the U.S. market for 2011.
Hankook Tire’s 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 alone. Tire demand and production in Indonesia continues to soar with Indonesia, Thailand, Malaysia and Vietnam collectively supplying 95 percent of the world’s rubber.
Hankook Tire’s investment in new production facilities is part of its commitment to produce 100 million tires a year by 2014 and become the world’s fifth-largest tire company, one of Hankook Tire’s midterm business goals.