Chinese Leader Visits Hankook Tire Plant

Chinese President & Party General Secretary Hu Jin Tao visited the Hankook Tire plant in Huai-an, Jiangsu Province and talked to the workers. More than 40 other senior provincial officials were also on hand.

A personal visit by a Chinese President to a foreign-owned company is extremely unusual, reflecting a national interest in Hankook Tire. President Hu expressed a great deal of personal interest as well. He asked about current operational status, future expansion plans, recent sharp hikes in raw material prices, and natural rubber price trends. Starting out as an engineer himself, the Chinese leader also inquired about equipment and technology used in each production process, including the vulcanization and forming methods applied in the truck and bus radial plant completed on the site last year. Other topics that arose during the plant tour: annual output, volume of OE tires delivered to Chinese automakers each year, yearly export volume, tire retail prices, and domestic market outlook.

According to Hankook Tire Production Support Team Chief Kim Hyun-chul, “President Hu examined Hankook Tire’s rapidly increasing production volume and expanding facilities capacity in China. His surprise visit also lifted the spirits of workers on the job during the extend Labor Holidays. President Hu said, “I thank you for coming to China and investing here. The cost of raw materials is rising, but I am certain Hankook Tire can succeed because of its competitive advantages in other factors of production such as production facilities and technology. The Chinese automobile industry is advancing quickly now, and development of the tire industry is an inseparable part of this. Therefore, the future prospects for Hankook Tire are very bright.

Introducing Hankook Tire’s China Operations

In 1999, Hankook Tire completed one plant at Jiaxing, Zhejiang Province and another at the Huai-an, Jiangsu Province as part of an operational globalization drive. Currently these two plants have a combined annual capacity of 15.85 million tires. In 2002, three years after start-up, the company’s China operations went into the black with W20.9 billion in profit. Ordinary income for 2003 reached W36 billion on sales revenue of W322.2 billion.

Currently, Hankook is the second largest tire maker in China in terms of output, and the company holds the top share of the Chinese passenger car tire market. At least one out of every four automobiles in China today has Hankook products mounted on it. The company aims to secure 35% of the Chinese market for passenger car tires and will expand annual output to 20 million units, supplying a large volume of OE products to China’s top three automakers. Hankook is also building a nationwide distribution network as part of a concerted effort to emerge as the largest tiremaker in China.

Moreover, Hankook’s China-made products have been recognized for quality excellence. For example, they outscored tires from Michelin, Pirelli and Continental to come out on top in a tire comparison test organized by Auto Plus, the leading automobile industry magazine in France.