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South Korean Hankook to kick off production in Indonesia
Publication Date : 05-07-2012
South Korea-based Hankook Tire, the world’s seventh-biggest tire manufacturer will start commercial operation of the company’s plant in Lippo Cikarang, West Java, Indonesia, in the last quarter of this year, the company’s senior executive says.
As of June, the firm had already completed 82 per cent of construction at the plant, which would absorb 1,200 workers in its initial phase, the plant management team’s senior manager, Yong Seop Hyon, said yesterday.
"Upon the completion of this plant, we will immediately continue to the next stages of the facility's development," he told reporters during a press conference in Sentul, Bogor, West Java.
The plant, built with an investment of US$353 million, is the company’s seventh tire manufacturing facility in the world. It is the first stage of Hankook’s five-stage development plan, in which the company plans to invest $1.1 billion ahead of 2018, when it hopes to produce 16 million tires locally.
In the initial phase, the plant would produce around 30,000 tires allocated for export to the United States, Hankook’s regional marketing and sales vice president Jae Bum Park said, adding that the export would begin at the end of this year.
The plant would boost the company’s output to 4 million tires in 2013 and 6 million tires upon its full operation in 2014, boosting the firm’s capacity to be able to generate 100 million tires globally and making it the world’s fifth-largest tire maker, he added.
"Indonesia will become our production hub for North America and the Middle East and other neighbouring countries," Park said, adding that the firm would allocate 10 per cent of its output to the domestic market, which along with other Association of Southeast Asian Nations (Asean) countries grew by 32.8 per cent in the past year.
Hankook, which is present through its local subsidiary, PT Hankook Tire Indonesia, will further invest around $5 million over the next two years to build up to 100 sales outlets nationwide, under the "Hankook Master" concept that has been employed overseas, according to the firm.
Indonesia’s tire market for cars and motorcycles last year was dominated by global giant Bridgestone, followed by other players such as Gajah Tunggal, Goodyear and Multistrada.