"By possessing production facilities in South Korea, China, Europe and the United States through the establishment of the U.S. factory, Nexen will be able to strengthen its sales activities with global original equipment manufacturers (OEMs) and meet the demands for localization amid changing global supply chain environment," Han said.
In a filing with the Korean Stock Exchange, the Seoul-based tire maker said the plant will be valued at $1.3 billion.
Han said the tire maker has unveiled a medium-term strategy with the goal of achieving sales of $2.7 billion in sales by 2027, a revenue growth of 40%. The plan, Han said, includes expanding global production and distribution capabilities, as well as "driving the electric vehicle business."
The tire maker plans to increase current production capacity, now at around 45 million units, to 52 million by 2025.That will involve expanding production by 5.5 million units in Europe and 1.5 million in Korea.
Nexen set it sights on supplying EV tires for premium vehicles, Han said, "aiming to raise the current OE EV tire ratio of 8% to 30% by 2027. This will enhance the brand value by expanding the supply to premium finished cars."
The U.S. plant would be Nexen's third outside of Korea, joining factories in China and Czech Republic.
For 2023, the company aims to increase sales to $2.2 billion with an operating margin of 6-8%.
This would build on Nexen's "record" consolidated sales of $2 billion in 2022, up 25% from 2021. For the year ended Dec. 31, the company recorded an operating loss of $42 million.
According to the most recent Tire Business Global Tire Report, Nexen sales jumped 41.5% in 2021. The tire maker ranks No. 18 in global sales, with sales of just under $2 billion.
The European Rubber Journal contributed to this report.