Hankook to speed up on eco-friendly tires

By Kang Seung-woo

Korea’s No. 1 tire company has set its eyes on becoming a leading global player through pursuing eco-friendly products, its high-ranking official said.

Pae Ho-youl, vice president of the marketing strategy department at the Seoul-based company, made the remarks in a recent interview with The Korea Times.

``Eco-friendly products have been the focal point of all industries as well as the tire sector. Social responsibility for the environment has been a factor of corporate competitiveness, and providing an eco-friendly and fuel-efficient commodity has emerged as the global trend in the area,’’ Pae said.

``In addition, the policies of many economically-advanced countries, including those of Korea, have been shifting to become more environmentally-friendly ones. Hence, we need to come up with tires meeting all regulations in the future.’’

``In our efforts leading up to this, Hankook Tire launched the industry-first green tire `enfren’ in 2008, after a two-year technical development.’’

According to Pae, Hankook Tire, one of the undisputed business bellwethers here, has invested 11 billion won in technical development and since 2008, has spent at least 20 billion won a year to manufacture the eco-friendly tire.

The company’s efforts toward green tires did not stop after the launch of enfren, as it released the improved version, `enfren eco,’ reinforced with various functionalities, including energy efficiency, at the Global Tire Expo-Specialty Equipment Market Association (SEMA) Show in Las Vegas earlier this month.

``Prior to a couple of years ago, consumers put their top priority on durability and wear-and-tear, but recently eco-friendliness has become a major factor in the selection of tires. So, the keyword in the industry will be green tires for the time being,” he said.

Hankook Tire, which was established in 1941, has recorded impressive numbers over the past decade.

The company posted 5.14 trillion won in turnover in 2009 and 620.2 billion won in operating incomes.

Both represent outstanding performances recorded in spite of the aftermaths of the worst post-war recessions, which began late in 2008.

Pae said that its early foray into the global market contributed to Hankook seeing good returns.

``Hankook Tire turned its eyes to global markets as early as the 1960s, expecting the eventual saturation of the local market and its attempts have paid off, with 70 percent of its sales coming from overseas. It also channels around 5 percent of its annual turnover into research, operating five R&D facilities in Korea, China, Germany, Japan and the United States, which has contributed to the company to see greater global sales,’’ he said.

``In addition, Hankook’s wealth of know-how on technology, quality and service from its 69-year history has met customers’ diversity of demands and its ceaseless drive to value the brand and aggressive marketing have also helped the company emerge as the No. 1 tire producer.’’

Pae expects that the portion of global sales will increase to 80 percent by 2014, when Hankook is targeting joining the ranks of the global top five.

Hankook Tire, headed by Chairman Cho Yang-rae, has been active in off-field issues, or corporate social responsibility (CSR), running its own welfare foundation.

The foundation has offered scholarship programs, medical services, free meals, while helping child-breadwinners and supporting social welfare facilities.

``Hankook will live up to its billing as the local No. 1 firm by participating in CSR activities,’’ he said.