Hankook president addresses supply, growth concerns

Strong growth and demand for Hankook products continue to place pressure on the company to meet its distributors' fill-rate needs. Two plants are currently under construction to ease supply constraints.

Soo Il Lee, president of Hankook Tire America Corporation, who says he is not comfortable speaking English in front of large groups, eloquently summed up the 2011 tire industry when he said, "I believe it was kind of similar to riding a roller coaster last year; up one time and down the next."

Lee told Hankook dealers at its annual dealer meeting in Punta Canta, Dominican Republic, that 2011 saw record sales for Hankook Tire America Corporation -- $1.2 billion in U.S. and Canada with $1 billion in the U.S. alone -- as well as the parent company, Hankook Tire Company Ltd. totalling sales of nearly $5.9 billion globally.

Despite this success, Lee said "the cost of raw materials skyrocketed throughout 2011 although currently it has stabilized a little bit. Tire makers, consequently, could not help but increase their prices, affecting consumer demand and subsequently sales volume."

Lee addressed supply and fill-rate issues directly. "I admit that last year our fill-rate was less than I would have liked, and I would like to apologize for that. In 2012, we will do everything we can; increase our production capacity and allocation to this market, make investments in bigger and better distribution centers, and operate our new back-order system."

Lee continued to express his desire to have "our own factory located in the Americas" which would be an ultimate effort to improve Hankook's service to its customers. No time frame for the plant was mentioned, however.

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