By Alex Kapadia
Nexen tyres are set to invest more than £500 million on a new domestic plant after anticipating growing demand in the wake of the US decision to slap steep tariffs on imported tyres from China.
The South Korean tyres manufacturer will make the £525 million investment by 2017 and predicts it will place them among the world’s top 10 tyre makers.
Nexen plans to double its annual output from its factories in South Korea and China to 60 million units, the company has announced.
The manufacturer said in a filing to the Korea Exchange: “Facing a shortage of production capacity and a rapid change in the market environment towards pro-environmental and low-fuel (cars), we have decided to build a new plant.”
It expects US duties against China-produced tyres will raise demand for South Korean products, with the new plant set to produce low-fuel vehicle tyres.
The factory, to be located in Gyeongnam Province, southeast of Seoul, would be the world’s largest to produce tyres for passenger vehicles and light trucks, according to the company.
Nexen competes in the global and home market with its bigger domestic rivals, Hankook and Kumho.