From TireReview

According to a recent report by CBS MarketWatch, Hankook Tire Co. expects to reach $1 billion in U.S. sales this year, boosted by an expected uptick in demand for "high-end tire products."

Profits, however, could be hurt by high raw material costs, especially natural rubber and oil.

According to the MarketWatch report, Hankook CEO Suh Seung-hwa told Dow Jones Newswires in an interview that the tiremaker would likely take a price increase in the second half of this year. Hankook Tire America took multiple increases in the first half of this year.

"We cannot hedge raw material prices. As there are no alternative materials to rubber in the manufacture of tire products, we have to use the raw material," Suh told Dow Jones. "There is no other way than enhancing the brand recognition to get higher prices."

Suh told Dow Jones that natural rubber prices appear to be settling after reaching a record $6,200 per ton in February. Still, he noted, natural rubber prices remain quite high compared to 2009 levels of $1,600 per ton.

U.S. sales for Hankook reached $994 million, he said, but Suh cautioned that raw material headwinds could dampen global profits for 2011; for 2010 Hankook reported profits of some $670 million. Suh said he expects an even tougher 2012 thanks to expected over-production and higher inventories by the entire global industry.

Suh told Dow Jones that Hankook’s global capacity will reach 120 million tires annually from its seven plants in 2015, up from 87 million units from five plants in 2011. New plants have been started in both China and Indonesia, and Suh said Hankook is considering “India, Brazil or Russia” for an eighth plant.

“In the long term, we may consider a plant in the Americas region, including the U.S., if we find a sizable replacement customer base in addition to OE opportunities.”