Tennessee factory providing boost for Hankook
With a $580 million plant opening last year in Clarksville, Tenn., Hankook Tire America Corp. has a higher profile than ever in its history. Jim Sicking, Hankook senior director PCLT sales, told Tire Business the company continues to position itself as a premium North American brand.
Q: With the year nearing its halfway point, how would you describe the state of Hankook in 2018?
A: Hankook Tire continues to grow its presence in the American market. We are aggressively positioning ourselves as an innovative, high-quality brand that believes strongly in American values.
We recently became the official tire of Major League Baseball — a decision that elevates awareness of our brand among an audience that closely mirrors our own. Our launch of the Kinergy ST pattern in April is the latest in a string of new products designed to meet consumers’ needs in a tailored manner.
Q: Where do you see industry markets going in the second half of 2018?
A: Customers purchased ahead of price increases in the first quarter of 2017, which led to higher sales numbers across the entire market than in the first quarter of 2018. However, we have rebounded very nicely in the second quarter and maintain an optimistic outlook for the rest of the year. Market fundamentals do not suggest sales will slow any time in the near future.
Q: What trends are you seeing in the marketplace? How are you reacting to them?
A: Increases in the cost of raw materials have elevated prices across the market. Hankook is committed to being responsive to such changes in a responsible manner.
Q: What sectors are struggling? Do you expect them to rebound? If so, how soon, and if not, why not?
A: We are not struggling in any sector. However, a flat tire market has presented challenges for all tire manufacturers. We continue to navigate shifting market conditions by providing our customers with unchanging quality. We believe the best way to overcome an inconsistent market is to offer innovative products and superior service.
Q: Do you foresee any price hikes in the second half of 2018?
A: We will continue to monitor raw materials prices and respond in a way that is sensitive to the needs of our company and our customers.
Q: How have the tax cuts affected you? In particular, are customers buying more tires because of it?
A: It is hard to attribute our sales performance to a single factor such as a tax cut. We believe our continued success comes from a number of factors, including great products, deepened relationships with our dealer partners and aggressive marketing.
Q: Are you planning any major investments in the next six months?
A: We are planning construction of Phase Two of the Tennessee plant, which will enable us to expand our production capacity and sales volume in the American market. We plan to hire several hundred more workers to staff the plant, and we are eager to reap the benefits this second phase will provide when it is online in a few years.
Q: The Clarksville plant has been up and running for about seven months. How is the facility affecting your business and your bottom line so far?
A: The Tennessee plant has helped our company in numerous ways. First and foremost, it has cemented our brand’s presence in the American market.
It has also provided us with the necessary economies of scale to unveil new products tailored to the American consumer, such as the Kinergy PT and Kinergy ST.
Finally, there are benefits from a distribution standpoint since we are producing tires in closer proximity to our customers. While any new plant inevitably experiences high initial costs, the benefits we are receiving outweigh the short-term expenses associated with construction and ramp-up.