SEOUL, South Korea—Hankook Tire Co. Ltd. expects to decide on the location of its first tire plant in the U.S.—most likely in the Southeast—by year-end, company executives said during a Sept. 2 press conference in Seoul.
The South Korean tire maker revealed late last year in an interview with Tire Business its intention to build a plant in the U.S., but at the time had not decided on its location.
In addition to the prospect of a U.S. tire factory, Hankook said it will be adding capacity in the coming year at its seven plants worldwide.
The company is reviewing plans for a plant in North America, with Tennesse, Georgia and South Carolina the leading candidates for the site of the production facility, said Hyun Shick Cho, CEO and president of Hankook Tire Worldwide Co. Ltd., in response to a question during Hankook Tire Press Day 2013 Sept. 2 in Seoul.
Annual capacity of the plant will be between 5 million and 10 million units per year, he said.
In an interview following the press conference, Hankook Tire Co. Ltd. Vice Chairman and CEO Seung Hwa Suh said the company is looking for a plant site in the southeast U.S.
“The proposals from different states are almost similar,” he said. “We are looking at actual land—which is a better selection and which is not as good.”
Hankook, he said, is being very careful in its decision process regarding the plant. Once built, a tire factory is not easy to dismantle, unlike many assembly plants, he explained. Once the company decides on the location, “we will stay there 50 years, 70 years,” he said. “So that is why we are more careful to decide the plant.”
Mr. Suh said Hankook has visited five to six states in its quest to find a location for the plant.
The average growth rate of the tire industry is about 4 percent every year or about 1.5 billion units of annual consumption, he said. At a 4-percent growth rate that amounts to about 60 million units in production growth per year.
Hankook is aiming at a 6-percent growth rate, he said.
“By this way our position in terms of production capacity is getting better and better,” he said.
Currently Hankook has annual production capacity for about 93 million units, said Calvin Pak, general manager of marketing for Hankook Tire America Corp. “So you can see 5 (million) to 6 million units (will) be added” by the company, he said.