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Biz News Korea(Eng)
Hankook Tire activates its Tennessee plant, expects better sales in the U.S.
- Collected
- 2017.09.21
- Distributed
- 2017.09.22
- Source
- Go Direct
Construction for its first North American and fourth overseas manufacturing facility broke ground in Clarksville,, Tennessee in October, 2014. It also produces tires from China, Indonesia and Hungary apart from Korea.
The first-phase construction allows the plant to turn out 5.5 million units per year.
The company will continue on with the second-phase construction upon studying the response from the early output, said an official at Hankook Tire.
In full-fledged operation, the facility will be able to roll out 11 million tires a year.
The company has so far spent 902.7 billion won ($800 million) on the facility, which is tantamount to 82 percent of last year’s operating profit of 1.1 trillion won.
Hankook Tire has decided to locally produce tires in the U.S. to improve price competitiveness against cheaper Chinese products.
Before, the company shipped its replacement tires made in Korea and China to North America. The logistics cost made its tires comparatively more expensive than products made in the U.S.
It also was hurt by the U.S. anti-dumping tariffs on China-made tire exports effective from 2015. The facility located near the home of major U.S. carmakers will also make its marketing easier.
As of 12:55 p.m. Thursday, shares of Hankook Tire were 0.51 percent down at 58,400 won from the previous session.
By Park Chang-young
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]