Korea’s Hankook Tire is making an additional investment of $358 million, into its Indonesian plant as it seeks to continue its expansion in Southeast Asia’s largest economy. The investment will be made throughout the course of the next 2 years, and will be used for “facility improvement. Hankook Tire Indonesia in
Korea's Hankook Tire is making an additional investment of $358 million, into its Indonesian plant as it seeks to continue its expansion in Southeast Asia's largest economy.
The investment will be made throughout the course of the next 2 years, and will be used for “facility improvement.
Hankook Tire Indonesia inaugurated its factory in Cikarang, West Java, in September last year with an initial investment of $353 million. The plant was built on a 60-hectare area of land where the company plans to reach production capacity of 6 million tires a year.
According to Hankook's statement, some 30 percent of production from Cikarang will be fed to the domestic market. The remaining 70 percent will be exported to other emerging markets in Southeast Asia, North America and the Middle East. The plant will produce tires for passenger vehicles and light trucks, among others.
Seung Hwa Suh, Hankook's vice chairman and chief executive, said at the plant's inauguration that the company planned to invest up to $1.1 billion in Indonesia through 2018.
Car sales in Indonesia rose to 1.2 million units in 2013, up 10% from 2012, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo). This year, the association expects roughly the same volume of car sales.
Motorcycle sales were also up in 2013 to 7.77 million units, an increase of 8.8% from 2013, according to the Indonesian Motorcycle Manufacturers Association (AISI), which expects 2014 sales to slow amid high interest rates and production costs.