Hankook to Raise Prices 10%

Hankook Tire intends to increase operating profit by 32 per cent this year, a target it will reach through the increased sale of high performance tyres and by raising prices to counter higher raw materials costs. Chief financial officer Cho Hyun Bum told media in Seoul that the company intends to charge 10 per cent more for tyres, a necessary measure if it is to achieve its targeted 2008 profits of 348.5 billion won (£188.7 million). Last year the company made profits of 263.6 billion won (£142.7).

According to a company statement, Hankook’s global sales may increase 20 per cent this year to 3.88 trillion won (£2.1 billion), and the company is boosting capacity for high performance tyres at its Geumsan, South Korea facility. The UHP tyre segment, which accounted for 14 per cent of sales last year, may account for as much as 20 per cent by 2010.

Hankook aims to cut the operating loss at its new facility in Hungary 6 billion forint (£17.19 million) this year from 7.3 billion forint in 2007, the statement said, adding that Hankook’s spending on factories and other capital projects will fall 18 per cent this year, following the opening of the Hungarian plant, to 531.7 billion won (£287.9 million).

Operating profit at Hankook’s two domestic facilities are forecast to rise 21 per cent to 330.6 billion won (£179 million) this year, the company said. Sales from the factories may rise 11 per cent to 2.5 trillion won (£1.35 billion), according to the company. The company has reported that fourth-quarter net income fell 59 per cent to 10.3 billion won (£5.58 million), revising figures disclosed on January 21. Operating profit rose about a third to 48.5 billion won (£26.26).