Nexen Tire opens its first European plant
The Korean company starts manufacturing tires designed for the European market in the Czech Republic
Francesca Del Bello
The industrial triangle of Žatec in the Czech Republic proved the perfect location for Nexen Tire’s first step into a new future. One made up of innovation and automation, the words that best describe the new Czeck production plant; a future made up of ambitious business strategies and objectives aimed at strengthening and expanding the company’s market. "Since the foundation stone was laid in 2015, Nexen has sought to broaden its horizon in Europe. As we reorganise our European headquarters, we intend to strengthen our sales and marketing network; furthermore, with new research and development centres in Germany and the Czech Republic, many talented engineers have joined Nexen. The supply of original equipment to major European car manufacturers such as Škoda, Seat, Renault, Iveco, Volkswagen, has helped us to understand the needs of the European market and meet its standards not only in terms of technology, but also as far as driving style is concerned," says Travis Kang, global CEO of Nexen Tire.
A step forward
This is in fact a historic moment for the Korean company, celebrated with an opening ceremony held on August 28, which saw the presence of the company's top management, representatives of Czech institutions, customers and journalists. Founded in 1942, with the name Heung-A Tire Industry later changed into Nexen Tire, was the first company to produce a tire on Korean soil back in 1956. The company continued to expand, opening manufacturing facilities in Asia and several subsidiaries worldwide, until 2015, when Nexen announced a $1 billion investment in its first European plant, which covers an area of 65 hectares. Production in Žatec started last April with ambitious goals: to reach 11million units produced by 2022.
With production now distributed over 4 plants (two in Korea, Yangsan and Changnyeong, one in China in Qingdao, and now Žatec in the Czech Republic), 4 research and development centres in 4 continents (in Korea, Germany, the United States and China) and numerous subsidiaries around the world, Nexen aims to position itself, by 2025, among the world’s top 10 tire makers. In order to achieve this ambitious goal, "Vision 2025" as the company call it, important investments have been made in different directions. Significant efforts have been made in global marketing campaigns, with a special focus on sports, as evidenced by sponsorship contracts signed with a number of top teams in a variety of sports: among these, one of the most well-known partners is Premier league Champions Manchester City. Nexen's marketing strategies are aimed at engaging a wider client base and improving its image across Europe: "Nowadays it is increasingly important to be present in all types of social media, increasing the visibility of our products," says Peter Gulow, managing director of Nexen for the DACH area. Moreover, significant investments have also been made in technological innovation, greater productivity and effective distribution networks, as the recently opened factory testifies.
Strategically located in the heart of Europe, in a country that currently enjoys a solid industrial sectors, what is most striking about the Žatec plant is the high level of automation within the factory: extruders, tire assembly machines, presses and even small self-driven vehicles that move quickly through the factory lanes have been automated. "We have achieved 100% automation: in other words, the entire production process has been automated - explains Kang -. In this cutting-edge smart-factory, we have also adopted all the necessary precautions to ensure product quality and to avoid jams in the system". With the new plant in Žatec, Nexen is looking at expanding its sales network as well as create new synergies within the local economy. At the moment, around 850 people work there, a number expected to increase to 1,300 by 2022. "We want to be part of this community, and we want to grow together," according to Kang.
Tires designed and made in Europe
Nexen’s European plant will serve to strengthen the company’s market presence in the old continent, but even more than that, it is also the ideal gateway to the Eastern European market. The factory's location, in a district where around 30 car manufacturers can be served within a radius of around 400 kilometres, will make it possible to speed up the supply of original equipment. Nexen already supplies OE tires to 24 car manufacturers, including Porsche, Volkswagen, Renault and Škoda - to name but a few - and aims to further improve this segment from its new European outpost. "Being present in the market as a OE manufacturer is very important for any tire maker, because this clearly demonstrates your technical skills: you need to reach the highest levels of technology and you are always coming up against all other brands in the market. Obtaining an approval from a major car manufacturer means having the highest level of technological development possible," comments Ralph Flachbart, product development engineer.
Not only original equipment, but also direct market. Nexen's strategy to improve its market positioning, making the most of the new plant’s potential, will be to supply a range of tires designed, developed and manufactured entirely in Europe. "Thanks to the new factory, Nexen Tire is able to plan, produce and directly supply tailor-made products for the European market," explains Travis Kang. Designing tires in Europe means having a range of products designed to meet the specific requirements of the European market; producing tires directly in Europe allows us to be more flexible, closer to our customers and partners in the OE segment. "This is our goal and our strategy here in Europe: to design in Europe, to produce in Europe," said Flachbart.
The range designed by Nexen for the European market covers all segments: as far as summer tires are concerned, Nexen will produce in Žatec the N'Fera Sport and N’Fera Primus for cars and SUVs, both classified as ultra-high performance tires, and the N'Blue HD Plus model in the high performance segment. For the winter season, the Korean company has developed two new models, specifically designed for the European market: WinguardSnow G3, a high performance tire, and Winguard Sport 2 an ultra-high performance tire, also available in the SUV version. N'Blue 4 Season, dedicated to the growing all-season market, will also be produced at the Žatec plant. "The all-season segment - explains Flachbart - keeps growing, along with the technological developments related to it: we integrated all our summer and winter tires know-how in developing this model".