Hankook Tire Co. Ltd. wants its new research and development center to make a statement. The 1-million-square-foot structure in Daejeon, Korea, a city known as “Asia’s Silicon Valley,” is an impressive sight. The building was designed by the same architect who created Apple’s world headquarters, and the stark white floors and walls of windows give the space a modern, Apple-ish look.
“The Technodome will serve as a focal point for technological advancement by securing technologies and developing future technologies,” said Seung Hwa Suh, vice chairman and CEO of Hankook. “I believe the new Hankook Technodome will be a great foundation to lead the future of tire technology.”
The Technodome holds six stories of laboratories. There are vulcanization, mixing, and extrusion labs, but there also are spaces designed for tire handling tests and noise level studies. In one room a 3-D scanner evaluates a tire’s profile. In another room a 3-meter drum is placed in the center of the floor. It’s covered in three different materials to simulate varying road surfaces and the noise a tire makes on each surface is measured. Yet another lab tests a tire’s structural elements. There are 90 labs in all.Each lab and the technology inside are needed to meet Hankook’s customers’ high standards, said Hyun Bum Cho, president and chief corporate strategy and finance officer. “Innovation is absolutely essential and critical, rather than something special, for survival in the current business environment.”
But Hankook is looking to do more than survive. With nearly $6 billion in sales in 2015, Hankook is inching toward the top five tire companies in the world. In 2017 it will open its seventh tire production facility – and its first in the U.S. – and by 2020 it will have the global capacity to produce 135 million tires a year. It is increasing its marketing investment and using motorsports as one path toward a more powerful position in the industry. Hankook supports 38 motorsports championships in 13 countries.Just like on the racetrack, success with original equipment manufacturers is dependent on an evolution of technology.
Bryan Woo, senior vice president and head of Hankook’s global OE division, said 2000 was a “landmark year for us” and the company is now working with almost every auto manufacturer. Hankook is supplying OE tires to 39 car makers on 295 models, including the flagship models of premium brands like Mercedes-Benz, BMW, and Audi. By 2020 it expects to supply OE tires to super cars, such as Lamborghini and Ferrari, and the company is developing tires for hybrid and electric vehicles, too, Woo said.
Those fitments are dependent on what is produced in the Technodome, the company’s central R&D center. And the work there will feed into Hankook’s four other R&D centers around the world, in Germany, China, Japan, and the U.S.
By 2020, the Technodome will house 1,000 specialized researchers. At the grand opening event in late October, the $262 million space housed 750 employees.
“We are going to be the global leaders in the global market,” said Suh. ■
What comes next for Hankook?
A day after unveiling its new R&D Center in Daejeon, Korea, Hankook Tire Co. Ltd. made clear its next focus.
“Internally, we need to expand more in TBR and LTR,” said Seung Bin Lim, vice president of the company’s global marketing strategy division.In 2015, truck and bus tires and light truck tires accounted for 10% of Hankook’s $6 billion in sales, compared to the 89% of sales attributed to passenger tires.
Adding more truck tires to the portfolio would lead to the need for more production. In 2012 Hankook had the capacity to build 89.3 million tires, and in 2016 it’s 103 million tires. By 2020 the company forecasts its capacity will reach 135 million tires — an increase of 31% in four years.
Some of that expansion will come from the company’s currently under-construction passenger tire plant in Tennessee. Phase one will be complete in April 2017, with capacity of 5.5 million tires each year. The second phase of construction will double production, and will “effectively meet the demands of the North American market,” the company says.
What remains unknown is whether Hankook truck tires could one day be manufactured in Tennessee. Two weeks after the Technodome opening in Korea, Modern Tire Dealer asked that question of Jae Bum Park, the senior vice president of marketing for Hankook Tire America Corp. during a meeting at the 2016 Specialty Equipment Market Association (SEMA) Show.
Park said, “It is not decided yet. After we complete the second phase of construction, then we’ll make a decision. The first two (phases) are definitely passenger.”
In the meantime Hankook has identified five regions as potential locations for future production sites: Mexico, Brazil, the Middle East, Russia, and Eastern Europe. Company officials didn’t provide a timetable for when they will make a decision, but Lim said some of those sites would be used to bump up truck tire production.