Hankook Tire Invests 230 million euros in Hungary Factory

Hankook Tire is to invest 230 million euros in its Hungary tyre production plant over the next 2 years in a bid to double production output from 5 to 10 million tyres a year by 2011. The latest injection of funds means the company has invested 550 million euros in the project. An official statement from the company said the latest move to ramp up production in Europe was a reflection of increasing demand there. Hankook’s decision to build a manufacturing facility in Hungary has been key to reducing customer delivery times from one month previously to just five days for the Europe-made Hankook tyres. However, the move also positions Hankook for increasing amounts of OE business, with the company openly bidding for the attention of “Audi-level” customers. Last year the company’s Hungary site began supplying OE customers in Europe, first Hyundai’s Czech factory (with tyres destined for the i30-compact car) then to Volkswagen Nutzfahrzeuge in Germany for the popular VW T5.

The additional investment is expected to create approximately 700 new jobs once it is fully operational at the end of 2011, bringing the total number of Hankook Tire employees on the Hungary production lines to over 1,900. The newly developed facility will also be fully automated, environmentally friendly, and equipped with state-of-the-art and latest generation production machiney. Hankook says it will also add run-flat production systems to the Hungary plant. Compliance with new EU labelling legislation, which must be put in place by 2012, will also be possible with the new equipment.

Jin-Wook Choi, Hankook Tire executive vice president and COO in Europe, affirmed: “We, at Hankook Tire, are confident in our belief that this investment will help to cultivate the already strong relationships we have with our partners in Hungary, which will ultimately help Hankook Tire continue to grow hand-in-hand with the Hungarian market as a whole.” He added, “With the additional production capacity, and even better productivity, we will be able to more aggressively focus on the European market, bringing us closer to our goal of becoming a leading global company.”

The Hungarian plant has been in operation since 2007 and is currently supplying various different tyre specifications to all Hankook Tire subsidiaries in Europe. According to Hankook, due to the reportedly growing demand for its tyres in Europe, the factory has been running at full capacity of approximately 15,000 pieces (as a daily average) since March 2008.