SEOUL, South Korea — Hankook Tire & Technology Co. Ltd. is targeting 10% growth in 2021 after suffering a 6.2% drop in revenue this past year, due in large part to a down global economy amid the COVID-19 pandemic.
For the year ended Dec. 31, Hankook reported 15.5% higher operating income of $533 million on sales of $5.47 billion, which translates to an operating margin of 9.8%, up nearly two points versus 2019.
Hankook attributed some of the earnings improvement to increased sales of larger-diameter tires (18 inches or larger), which amounted to around 35% of total sales.
It also cited a "continued strategic application of its global top-tier technology and outstanding' product quality" for paying dividends during these "unprecedented times"
As for the company's outlook, Hankook noted that its business in Europe, North America and China increased during the second half of the year and it expanded its OE supply relationships with a number of premium car makers, setting the stage for growth in 2021, the company's 80th anniversary year.
Sales in the fourth grew 6.2% over 2019, Hankook reported, helping boost the operating profit 95%.
Growth of 10% would put the company close to $6 billion in sales. Other strategic objectives on the growth agenda are optimizing distribution strategies for each region and diversifying the product portfolio based on quality competitiveness.
In North America, Hankook suffered a 13% drop in sales to $1.4 billion.
Looking ahead, Hankook plans to invest $85 million in the Clarksville, Tenn., plant in part to accommodate the production of tire SKUs that likely will be shifted to the U.S. from South Korea as the company deals with the pending elevated import duties imposed by the U.S. government.
Hankook is facing antidumping duties of 38.07% on the value of passenger and light truck tires shipped into the U.S. from Korea, although Hankook points out these "may be subject to change based on final determinations."
Hankook said it will "continue [its] vigorous advocacy until the final determination," which is due in early July.
Other actions the company is considering are price increases and approaching individual OE customers about "sharing tariffs."