Hankook Tire has selected Dunaujvaros, Hungary, as the site for its next tire plant. When fully operational in 2010, the 500 million euro plant is expected to produce 10 million ultra-high performance passenger and light truck tires annually.
The tiremaker recently held an investment signing ceremony at its headquarters in Yeoksam-dong, Seoul, South Korea, hosted by company CEO Cho Choong-hwan.
The Hungarian factory will serve as the tiremaker’s production base in Europe and will be built on a 160,000-pyeong (54ha) site in Dunaujvaros, 68 kilometers south of the Hungarian capital of Budapest. The aim is to start operation in 2007.
The majority of goods produced in this new plant will be supplied to Europe, which is among the company’s major strategic markets.
Hankook Tire’s exports to Europe accounted for 36.8% of total exports last year, amounting to $317 million (based on FOB). The company's 2004 total exports totaled $862 million. The projected exports to the European market are estimated at $400 million this year.
With the construction of a Central European plant, Hankook Tire is hoping to resolve problems stemming from EU’s powerful economic block and the dangers of exchange rate fluctuations, the company said. It also is expecting a reduction in manufacturing and logistics costs.
In 2008, Hankook Tire’s annual production volume will reach 70 million units. It is currently producing over 58 million tires a year from two plants in Korea (Daejoen, Gumsan) and two plants in China (Jiaxing and Jiangsu).
With the construction of the Hungarian plant, the company will be equipped with a full-blown global production system linking Korea, China and Hungary, the company said.
"The company has been reviewing possible plant sites in Central Europe including Poland, Hungary, the Czech Republic and Slovakia to supply products to the European markets, which has the highest proportion of Hankook Tire’s exports" a company spokesman said. "In the end, Hungary had the edge over the other candidate countries in terms of logistics and production costs, skilled workers, accessibility to Western Europe and pro-active government cooperation."
Hankook Tire recently set up a local corporation in Hungary.
