CLARKSVILLE, Tenn.—South Korea's Hankook Tire Co. Ltd. has settled on a site near Clarksville for its first U.S. tire plant, an $800 million investment that should be producing tires by 2016.
Hankook said it picked the site near the Tennessee-Kentucky border after evaluating dozens of potential locations throughout the southern U.S., in part because of its central location and access to transportation and to be close to the car assembly plants of many of its OE customers.
Hankook also will receive incentives from the state of Tennessee, Montgomery County and Clarksville valued at $122 million, according to the Tennessee Department of Economic and Community Development. The package of incentives includes 469 acres of land donated by the city and county.
"This new facility will help Hankook Tire accomplish our plan to establish a production base in all major markets," said Hankook Vice Chairman and CEO Seung Hwa Suh, speaking at a ceremony in Clarksville on Oct. 14.
"We will be able to provide our customers, consumers and car makers with high quality tires and industry-leading service to meet the demands of the American market."
The car and light truck tire plant reportedly will have an expected initial capacity of about 6 million tires annually, with about 1,800 full-time jobs at full capacity. A second-phase build-out will boost capacity to 11 million units a year by 2018, Hankook said.
Included in the state's $72 million incentive package are funds for training, construction of a training facility and a Korean cultural center in the Clarksville area, according to Bill Hagerty, the state's commissioner of economic and community development.
The economic development department said it based its incentives on job count, job quality and capital investment. It did not do a specific economic impact study for this project.
Hankook also is expected to benefit from a series of road improvements and the construction of a railroad spur to the plant, the local news reports indicated.
The package compares favorably with the $130 million in incentives that Yokohama Rubber Co. Ltd. received toward its building of a truck tire plant near West Point, Miss.
Mr. Suh pledged that most of the jobs being created at the plant would be filled locally.
Hankook has grown steadily the past decade, both globally and in North America, where it generated more than $1.4 billion in sales last year.
Along with expanding its aftermarket business, Hankook has garnered a number of OE contracts with U.S.-based vehicle makers, including: American Honda Motor; Chrysler Group L.L.C.; Ford Motor Co.; Hyundai Motor Co.; Kia Motors Corp.; Nissan North America; Toyota North America; and Volkswagen of America Inc.
Hankook announced the selection of the plant's site at the Wilma Rudolph Event Center in Clarksville in front of a group of more than 2,000 assembled local and state officials and media representatives, including Tennessee Gov. Bill Haslam, who thanked Hankook for its "substantial investment" in the state.
The tire maker expects to break ground before year-end.
Clarksville, a city of about 140,000 about 50 miles northwest of Nashville, offers an extensive transportation network including rail, plane and interstate highways as well as regional access to the Mississippi River inland waterway, Hankook said.
The tire maker also evaluated sites in Georgia and South Carolina.
Hankook first disclosed plans for a U.S. plant at last year's Specialty Equipment Market Association Show in Las Vegas.
The plant will be the sixth tire plant in Tennessee and will nearly double the number of tires produced daily in the state to 65,000 at full capacity. That would make Tennessee the No. 4 producing state in the U.S.
Bridgestone Americas' plants in the state are unionized facilities, while those operated by Carlisle Tire & Wheel and Specialty Tires of America are not.
Hankook already has a research and development facility in the U.S., in Uniontown, Ohio, which has been in operation since 1992.
This latest investment raises to $1.57 billion the amount of capital spending the company has committed in the past year to expansions and improvements. Other projects include: $240 million for a tire proving grounds and engineering center in South Korea; $133 million for a dedicated research and development center in Daejeon, South Korea; and $400 million to expand capacity at its plant in Rácalmás, Hungary,
It also brought on stream a $353 million car and light truck tire plant in Bekasi, Indonesia.