Hankook Tire Co., Ltd. Business Report FY2011

Business Highlights

Highlights in FY2011 (ended Dec. 2011)

Financial Overview (Consolidated)

(in millions of won)
FY2011 FY2010 Rate of
Sales 6,488,973 5,420,068 19.7% - Sales increased, supported by greater sales of ultra high-performance (UHP) tires, which increased by 58.9 percent in Europe, 27.1 percent in North America, and 14.8 percent in Asia and Oceania compared with the previous year’s results.
- Sales of UHP tires to non-Korean car manufacturers jumped 92 percent from last year.
Operating income 567,278 623,582 (9.0%) -
Net income 355,220 462,787 (23.2%) -


The Company was awarded a program business from Toyota and started supplying its tires for the iQ model in September 2011. The tires for Toyota are currently being manufactured at the company's Geumsan factory in Korea. (From a press release on December 8, 2011)

The Company will supply its Ventus Prime2 tires for the BMW 1 Series. The 195/55R16V tires will be fitted on the 116i, 118i, 116d and 118d versions of the car, while the 205/55R16W tires will be used on the 120d version. The tires for BMW are currently being manufactured at the company's Geumsan factory in Korea. (From a press release on December 2, 2011)

The Company will supply new ultra high performance tyre Ventus Prime2 for the BMW MINI. Initially, Ventus Prime2 will now come factory-installed in the dimension 195/55R16, the size which is originally fitted to the Cooper S models. In addition, Hankook Tire will deliver the Ventus Prime2 in the same size as an optional tyre set to the assembly lines at the MINI factory in Oxford, England for the One, Cooper, and Cooper D models. Currently, the tyres for the MINI are being produced at Hankook's head plant in Geumsan, South Korea. (From a press release on May 31, 2011)

The Company's manufacturing plant in Hungary is expanding OE supply business to the European market. The Kia Sportage will from now on come factory equipped with Hankook’s Optimo K415 in the size 225/60R17H. The tires are delivered from Hungary to Kia's manufacturing plant in Zilina, Slovakia. Hankook has already supplied various tires to the car manufacturer's Slovakian plant from its Korean facilities. The Hungarian plant aims to increase the OE tire production rate from the current 10 percent to 20-25 percent of the total production during the upcoming years. (From a press release on September 8, 2011)

The Company will supply its Optimo H426 tires to Ford for installation on the 2011 Explorer SUV. The company is also providing original equipment tires for Ford's other vehicle models including the F-150, the Edge, the Flex, the Mondeo and the Fusion. (From a press release on February 10, 2011)


The Company announced that the 25 millionth tire rolled off the production line at its Hungary plant in November 2011. The company has invested 550 million euros in the facility so far. This plant now produces 12 million tires per year, supplying them to the European facilities of Volkswagen, Hyundai-Kia and other automakers.  (From a press release on December 21, 2011)

Business plan

The Company announced the financial targets of its global tire business for the year ending December 2012. The company targets generating sales of 7,232.8 billion won, which is an 11.5 percent increase from 2011's 6,484.4 billion won; and posting an operating profit of 818.2 billion won, a rise of 44.5 percent compared with 2011's 566.3 billion won. The total production for the year is expected to reach approximately 90 million tires, which is a 5 percent increase from the previous year. (From a press release on January 31, 2012)


R&D Structure

Facility Location
Main R&D Center Daejeon,
Akron Technical Center Ohio,
China Technical Center
Zheziang Province
Europe Technical Center
Japan Technical Liaison office

The Company and Daejeon Metropolitan City of Korea signed MOU for the relocation and expansion the company's main R&D center in Daejeon, Korea. With total investment amount of 147,199 million won, the construction work will be finished in the first half of 2013. The current center will be converted and used for research work on new production technologies and for tire testing, which have taken place at Geumsan plant in Chungcheongnam-do up until now. (From a press release on March 16, 2011)

R&D Expenditure

(in millions of won)
FY2011 FY2010 FY2009
Amount 116,721 100,423 101,595
% of sales 1.80% 1.85% 2.15%

Investment Activities

Capital Expenditure (FY2011)

(in millions of won)
Planned amount of investment Amount invested
Korea New facilities and equipment 89,033 53,363
Maintenance and repair 253,854 156,702
China New facilities and equipment 212,657 125,296
Maintenance and repair 64,203 72,056
Hungary New facilities and equipment 125,416 120,267
Maintenance and repair 9,165 3,905
Indonesia New facilities and equipment 141,793 94,819
Maintenance and repair - -
Total 896,121 626,408


Investment Projects

In January 2011, the Company announced plans to set up a new factory in Bekasi, Indonesia. The construction work will begin in the third quarter of 2011 and is scheduled to be completed by September 2014. The new facility will produce passenger car tires and light truck tires with a total annual production capacity of 6 million units. (From a press release on January 21, 2011)

In June 2011, the Company held a groundbreaking ceremony for its new plant in Lippo Cikarang, Indonesia in June 2011. As a first phase of the project, the company will invest approximately 350 million dollars to ensure an annual production capacity of 6 million tires. Tires produced at this plant will be exported to North America and the Middle East as well as emerging markets in Central Asia, South America and Africa. (From a press release on June 11, 2011)

In October 2011, the Company announced the completion of its second Hungary plant production unit. Construction works for the expansion started in September 2009. The company invested an additional 230 million euros to build a second production unit in Hungary, totaling investments in the country to 550 million euros. This plant currently produces tires for passenger cars, SUVs and light trucks. Since the initial opening of the plant in 2007, over 22.5 million tires have been produced in Hungary. While 6 million tires were produced in 2010, this year’s total production is expected to reach 9 million tires, going up to 12 million tires as of 2012. (From a press release on October 17, 2011)

In May 2011, the Company held the groundbreaking ceremony for its third Chinese Plant in Yufu Industrial park of Chongqing Liangjiang New Area. Hankook Tire signed a 954 million USD investment agreement. With an area of approximately 530,000 square meters, the new plant will start operation by August 2012. The plant will be completed by the end of 2015 and will produce 4,500 truck bus radial tires and 30,000 PCR tires per day. It will have production capacity of 11.5 million per year, among which 1.6 million units are truck-and-bus tires. (From a press release on May 19, 2011)