South Korea’s Nexen Tyre will spend 1 trillion won (US$829m) on a new domestic plant to meet growing demand, seeing benefits from a US decision to slap steep duties on tyre imports from China.
The investment to be made by 2017 will place it among the world’s top 10 tyre makers, more than doubling annual output from its factories in South Korea and China to 60 million units, the company said on Monday.
“Facing a shortage of production capacity and a rapid change in the market environment towards pro-environmental and [fuel efficient cars], we have decided to build a new plant,” Nexen said in a filing to the Korea Exchange cited by Reuters.
It expects US duties against China-produced tyres will raise demand for South Korean products, with the new plant set to produce tyres for high efficiency vehicles.
The factory, to be located in Gyeongnam Province, southeast of Seoul, would be the world’s largest making tyres for passenger vehicles and light trucks, the company said.