GS Caltex, Hankook Tire Team Up in Exploring Overseas Markets

Sign an agreement to forge a strategic alliance

GS Caltex and Korea Tire have joined forces to explore overseas markets by making the most of each other’s strengths in what is a strategic alliance involving different types of business. GS Caltex President Na Wan-bae and Hankook Tire President Cho Hyeon-beom recently met and signed an agreement to forge a strategic alliance in exploring such overseas markets as China and India.
The two companies enjoy an outstanding standing and sizable shares in Korea, but they have weak points on overseas markets, so they have sought a strategic alliance to make up for each other’s weak points and have synergetic effects, officials from the two companies said. Initially GS Caltex and Hankook want to target the huge Chinese market they have already entered, and the two come to agree on the specifics, including business areas, while conducting market surveys, the officials said. In the years to come, the two could make joint ventures in the Indian market, they added.
The latest alliance was made possible by GS Caltex, who made the proposal with the goal of expanding revenues from the overseas business sector.
GS Caltex’s overseas business sector is simple due to the character of its business type. The nation’s second largest refiner has run filling stations, has acquired a polypropylene manufacturer in China, and the refiner has established a lucrative sales outlet in India.
However, the GS Business Group has stepped on the gas to search new business growth engines while expanding revenues from the overseas business sector as a new growth axis.
`GS Caltex has strengthened its business presence in China since 2007 by establishing four kerosene marketing companies in such areas as Chingtao and Yentai in Shandong Province, which simultaneously conducting a side job of giving a preliminary maintenance to automobiles. The refinery industry has times in China since the Chinese government imposes sizeable restrictions on approval and license related to the expansion of filling stations. GS Caltex, which acquired a polypropylene manufacturer near Beijing, now supplies polypropylene products to operations in China for the Hyundai Motor-Kia Motors Group and for LG Electronics.
GS Caltex India is GS Caltex’s first overseas lucrative oil sale offshoot in India, which is put on the top priority list of the Korean refiner. GS Caltex President Na said his company’s overseas market entry is not just necessary conditions, but survival conditions, so GS Caltex plans to aggressively make inroads into overseas markets.
Hankook Tire has made a splash overseas since a long time ago. The Korean tire maker has maintained the No. 1 position with an about 20 percent share in the Chinese market, beating global players, including Bridgestone and Michelin. Hankook Tire become the first foreign tire manufacturer to establish locally incorporated tire plant companies in Jiaxing, Zhejiang Province and Jiangsu, supplying an annual average of 29 million tires to such global carmakers as Volkswagen, Hyundai Motor and Kia Motors.
The Korean tire maker inaugurated the first T’ Station, an exclusive deluxe tire outlet in Shanghai in 2005. HanKook, which now has about 50 T’ Stations, plans to expand the figure to about 300 , including outlets in Beijing and Tianjin, by 2013. In 2007, Hankook tire built a local plant with an annual capacity of 5 million tires in Hungary. Hankook Tire is seeking to establish a third tire manufacturing plant in China and another in Indonesia to expand its global network at a brisk clip.
It is compelling for the two conservative companies to join forces with their joint goal of exploring overseas markets., a business source said. nw

(left) An aerial view of GS Caltex’s Yeosu plant. GS Caltex has teamed up with Hankook Tire to expand their overseas presence. (right) GS Caltex Chairman & CEO Hur Dong-soo.