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NEWS | Press Release : Hankook Tire Solidifies Partnership with Indonesian Government as it Establishes a New Local Plant

Press Release

Hankook Tire Solidifies Partnership with Indonesian Government
as it Establishes a New Local Plant

Hankook Tire promises partnership and mutual growth with Indonesia at a welcoming ceremony held by the Indonesia Investment Coordinating Board on January 20, 2011.

New Indonesian plant will support Hankook’s goals to become the world’s fifth largest tire company, annually making 100 million tires by 2014.

Hankook’s investment is expected to help promote investment in Indonesia and create significant opportunities for local employment.

January 20, 2011 (Jakarta, Indonesia) -- Hankook Tire (www.hankooktire.com), currently the seventh largest and one of the fastest growing tire companies in the world, today shared its future vision for a collaborative partnership and mutual growth with Indonesia at the welcoming ceremony held by the Indonesia Investment Coordinating Board (BKPM) in Jakarta.

The event was hostedby Chairman of the Indonesia Investment Coordinating Board, Mr. GitaWirjawan, and attended by the Minister of Industry, Mr. M.S. Hidayat, and Hankook Tire Executive Vice President, Mr. Hyun Bum Cho, , as well as other officials representing the two nations. Hankook Tire and Indonesia reaffirmed their commitment towards the development of the tire manufacturing industry as well as other supporting industries for automotives, and exchanged speeches and souvenirs that promised the future support between the parties.

Hankook Tire in December 2010 unveiled its USD 353 million investment plan as a first investment phase to build a new manufacturing plant in Bekasi, Indonesia, which is expected to rise to USD1.1billion by 2018. This large-scale global production center in Southeast Asia is a valuable breakthrough for Hankook Tire, as it will enable the company to become the world’s fifth largest tire company. It is also expected to support Hankook in achieving an annual output of 100 million units by 2014, a part of Hankook Tire’s mid-term business goal called the 5-1-1.

The Indonesia Investment Coordinating Board (“BKPM”) has been a big supporter of this planned invsement and has provided full administrative and coordination assistance to the company. The government body’s support was one of the factors that weighed heavily on Hankook’s decision to make Indonesia its manufacturing hub in the ASEAN region. Hankook Tire’s investment is expected to help promote investment in Indonesia, which is in alignment with Indonesian government’s goal of attracting Rp 2,000 trillion in investment per year over the next 5 years.

In return, Hankook Tire’s investment is expected to create approximately 1,400 new jobs for the local labor force by 2014, a figure that is expected to climb to 4,200 by 2018. The company and will be providing the necessary training for its local employees, resulting in a highly skillful workforce in tire manufacturing.

Mr. Gita Wirjawan, Chairman of the Indonesia Investment Coordinating Board said, “We are very pleased with Hankook Tire’s decision to establish its Southeast Asian manufacturing hub in Indonesia. This investment is not only testament that Indonesia’s booming consumer market has made it an attractive destination for the automotive industry to invest, but also demonstrates how the country has repositioned itself into a manufacturing base for industry in general. ”

Mr. Wirjawan added, “We are positive that the new plant and the government support that has been displayed by the Ministry of Industry thus far would help Hankook Tire reach its goals for sustainable growth. We are also confident that Hankook Tire will be a model corporate citizen as it engages in various CSR activities within the local communities which it operates. We hope to further strengthen our relationship with Hankook, and expect this to be one of the first of many positive relationships between Indonesia and other South Korean corporates.”

Hyun Bum Cho, Executive Vice President and CSFO of Hankook Tire said, “Hankook Tire is excited to build a new growth engine in Indonesia which would strengthen the company’s top position in the global market by responding to the customer needs in quality and productivity.”

Mr. Cho added, “By establishing a large-scale production base, we would also contribute to Indonesia’s social and economic growth as we had achieved through our existing partnerships with China and Hungary.”

Hankook’s new plant in Indonesia will be providing passenger and light truck tires to customers in the global markets. The construction site expands over an area of 60 hectares (600,000m2), and has convenient access to export logistics as well as to other production infrastructure resources including electricity and workforce. These benefits will reduce costs and enhance profitability, realizing Hankook Tire’s envisioned global operational excellence.