Hankook looks for growth in 2018

CLARKSVILLE, Tenn.—Following on opening its first North American production plant, Hankook Tire America Corp. is planning for more growth in 2018.

That includes making more tires in the U.S. that are tailored for the U.S. market, Jay Kim, vice president of corporate strategy, said in an email interview.

The new 1.5 million-sq.-ft. production plant was officially unveiled in October of last year, and Hankook already has hired more than 1,000 workers for manufacturing and plant management positions.

"We are making thousands of tires every day thanks to a vibrant, productive employee base. We have built close relationships with state and local leaders and community organizations," Kim said. "We have enhanced our relationships with customers by shortening distribution lead times and producing high-quality products built for American roads."

Kim said Hankook chose Clarksville for the facility primarily because of its strong work force.

"The area is producing talent at a rapid pace, thanks to the Fort Campbell Military Base, Austin Peay State University and the outstanding local school system," he said.

Hankook received local and state incentives focused on helping hire and train workers for the facility, with the bulk of the funding coming in the form of reimbursements for the investments made to strengthen the local community, Kim said.

"As a result, we are essentially incentivized for the positive economic impact we provide Clarksville and the state," he said.

The new facility is in its first phase, and Hankook is planning a second, which would enable it to increase production volume and distribution. The plant can produce about 5.5 million tires per year, and Phase 2 will "essentially double that capacity," Kim said.

"Rising demand for Hankook products is driving us to bolster our production and distribution processes, and we are eager to rise to that challenge," he said.

Phase 2, an investment of about $800 million committed to the state, will create about 800 new jobs, Kim said. No timeline for the second phase was disclosed.

"The main benefits will be higher production volume and a more diverse array of products made locally," Kim said.

Hankook does not have concrete plans for any additional phases at this time, although the plant site has space "to expand our facility as demand for our product dictates," Kim said. The profitability of the first two phases will determine future expansions.

New U.S. tires

The Clarksville plant is one piece in Hankook's growth strategy, with an aggressive market penetration strategy within the American tire market, according to a Hankook release. The Kinergy PT (H737) is another part of that strategy, made exclusively at the Clarksville plant, and launched in September 2017.

The tire uses a specially formulated tire compound to enhance traction in all conditions, and a strong rolling resistance profile to improve mileage performance, according to Hankook.

"The Kinergy PT is among the highest-rated tires in the industry," Kim said. "It has an elite (Uniform Tire Quality Grading) rating of 860/A/A and has received acclaim from our customers and end-users. As a premium touring all-season tire, it has been very competitive in its market segment."

Hankook is planning to produce more tires stateside in the future, though Kim did not disclose details.

"We are excited to introduce other tire offerings that maintain the same elite standards for quality and performance," he said.

The company also is making research and development a high priority with a focus on innovation, Kim said.

Hankook also made new original equipment relationships in 2017, making more connections in the U.S. tire market. In October, Hankook said it would serve as the main OE supplier for the Honda Accord, fitting the Kinergy GT model, according to the company. It said it also would equip select models of the 2018 Toyota Camry with the Kinergy GT.

Hankook also delivered a new tire with a sound-absorbing "silent foam" for the 2018 Nissan Rogue SV, according to the company.

In addition, it was a General Motors Supplier of the Year last year for the first time in the company's history, Kim said.

"Auto makers are more aware of our product quality than ever before, and that's bearing itself out in the OE market," Kim said. "We have continued to aggressively pursue new relationships, such as our recently announced fitment on the Lincoln Navigator. Several more OE partnerships are in discussion. We are eager to announce some new relationships soon."

Strengthening partnerships with auto makers is a step toward cementing a reputation for performance and durability, increasing market visibility, Kim said.

Helping out veterans

Another aspect of that visibility is continuing the company's relationship with Disabled American Veterans, an organization that provides support to veterans and their families. Hankook marked its third year with DAV in 2017, hosting mobile service offices around the U.S. The MSO program travels to smaller towns and rural communities to assist and educate veterans and their families about available benefits and services. Hankook hosted six MSO stops last year, including Fayetteville, N.C., and Yucca Valley, Calif.

The MSO stops last year served three times as many more veterans than they did in 2016, when Hankook sponsored four stops, the company said.

"Hankook America is passionate about doing our part to show our gratitude to the men and women who serve this country," Kim said.

Hankook has plans to expand its relationship with DAV going forward, but Kim was unable to disclose more details.