INDONESIA: Hankook inaugurates Cikarang tire plant

Built over the course of three years on a 60 hectare Lippo industrial estate in Cikarang, the plant, Hankook's seventh, is slated to produce six million tires each year for passenger cars, light trucks and ultra high performance vehicles.

Hankook said it invested USD 353 million in the project, with the expansion work planned to continue until 2018. It said it would invest up to USD 1.1 billion in the plant by 2018, and that it would act as an export base for North American and Middle Eastern markets, as well as a regional business hub for emerging Asian markets.

The plant employs 1,400 workers and is on track to employ 4,300 by 2018.

Hankook produced more than 94 million tires worldwide in 2012, up 8.3 % from the previous year. It expects annual global production capacity to reach 100 million units by 2014.

Hankook said it chose to built its new plant in Indonesia because of a promising market, a rising middle-income class and extensive domestic rubber production.

Demand for tires continues to soar in Indonesia, with domestic car sales at 1.1 million units in 2012, the highest yet recorded. Automotive industry insiders expect the same figure for 2013, despite rising interest rates, rising inflation, environmental concerns and global economic turbulence.

Present on the occasion were President Susilo Bambang Yudhoyono and high profile executives such as Hyun Shick Cho, president and CEO of Hankook Tire; Bum Cho, president and chief marketing officer of Hankook Tire; Meow Chong Loh, president director of Lippo Cikarang, which operates the Cikarang industrial estate; and James Riady, Lippo Group chairman.

"The nation has the potential to produce 3.3 million tons of natural rubber annually, but we have only developed a small fraction of that figure,” Yudhoyono said in his speech at the event.

The nation's tire industry, he added, is a leading competitor in the global market, growing about eight percent per year, in accordance with rapid vehicle industry growth. He urged the industry to continue its growth by seeking national and international investors.

"[The] tire industry in Indonesia will keep growing and become one of the world's tire industry development centers,” he said.

Source: Daily "The Jakarta Globe", Jakarta; 17 Sept 2013(Syed Rashid Ali, Karachi, Pakistan)