KOREA (SOUTH): Hankook Tire shining in global markets

Many people are well aware of which automakers are doing well in China ? General Motors and Volkswagen are leading the pack in what is emerging as the world's single-largest car market.

In contrast, few recognize which corporation dominates the potential-loaded Chinese market in one of the most significant of auto components ? tires ? the Korean firm Hankook Tire.

The Seoul-based outfit has two factories in China, which combined to roll out a total of 30 million tires per year providing approximately a fifth of the demand there to stay ahead of its international competitors.

``We continue to grow rapidly in China where we posted record quarterly sales of 373 billion won during the April-June period of this year,'' Hankook Tire spokesman Jung Il-ryong said.

``On top of China, we are consolidating our efforts in other foreign markets, which account for almost three-quarters of our revenue stream.''

Hankook Tire is positioned seventh in the world in terms of its 2009 performance, according to a survey published in the January 2010 issue of Modern Tire Dealer magazine.

The company has clocked fast growth over the first decade of the new millennium, more than doubling its sales during the period.

Despite the aftermath of the global financial crisis, it chalked up 5.14 trillion won in 2009 turnover, up 15 percent from 2008, and saw 620.2 billion won in operating profits.

Hankook Tire, the undisputed leader in Korea whose history stretches back to 1941, is jockeying to jack up profits to $1 billion or around double the 2009 figure by 2014 through more proactive endeavors outside the country.

``Our eventual goal is to join the ranks of the world's top three players and toward that end, it is crucial to further raise our profile on the global scene,'' Jung said.

Global endeavors

The global initiatives are seemingly engraved in the corporate DNA of Hankook Tire as the country's oldest tire producer turned its eyes to offshore markets as early as the 1960s.

The corporation first exported products to Pakistan in 1962 and launched a branch in Kuwait in the 1970s to tap into Middle Eastern states. Thereafter, it made forays into other overseas destinations.

Korea's tire industry bellwether racked up notable global successes in the 1990s through providing its products to Western behemoths under subcontracting as an original equipment manufacturer (OEM).

Currently, Hankook Tire offers its merchandise to such carmakers as Audi, Ford, Chrysler, Honda, Nissan, General Motors and Volkswagen in addition to Hyundai Motor and Kia Motors to name but a few.

On the back of these exploits, the company has expanded its branches across the world to 80, shipping tires to about 180 countries.

Spokesman Jung said that the firm's prowess is due to its research, ``The competitive advantage of Hankook Tire is empowered by its brisk research and development (R&D) activities.''

It channels around 5 percent of its annual turnover into research, running five R&D facilities in Korea, China, Germany, Japan and the United States, which accommodate more than 800 top engineers.

The 69-year-old company has funneled $10 million over the past six years into the futuristic technology of run-flat tires, designed to enable a car to keep driving even after a tire suffers a puncture.

Starting in 2008, it has pulled out all the stops to make advancements in the next-generation technologies of coming up with eco-friendly tires in preparation for when top priority will be given to the protection of the environment.(Syed Rashid Ali, Karachi, Pakistan)