Richfield, Ohio – Nexen Tire Corp will invest $7 million (€6.2 million) in an expanded research and development centre in the village of Richfield.
The South Korea-based tire maker plans to construct a 30,000-sq.-ft. building on a four-acre site purchased from the city once it signs the contract in September, said Don Lee, Nexen's director of technology at Richfield. The building will account for $4.6 million of the total investment.
Nexen plans to break ground on the project in late 2015 or early 2016, with completion expected about one year later. The site should be operational by 2017 and at that time, 10 jobs will be added to its work force of about 16.
The firm could create up to 30 total jobs as it moves into the second and third phases of the project, which Lee said are not finalised yet.
“We have a plan to expand our businesses to other American automotive companies,” he said. “To actively expand the business, we believed that we need more research and development functions in this country.”
Nexen operates out of two buildings in Richfield Village – an 8,000-sq.-ft. office building and a 5,000-sq.-ft. development space. Lee said the new building will bring all of Nexen's operations under one roof and will include a full test facility in addition to expanded space for projected future business. He said the company's corporate research and development centre in South Korea currently does all of the testing.
The firm supplies Fiat Chrysler Automobiles, Hyundai and Kia America with original equipment tires. Lee said the company hopes to secure future business with Ford, General Motors, Honda and Toyota.
Nexen contacted several city governments, including Akron and Fairlawn, but officials ultimately decided to remain in Richfield largely because of their frequent travel to Detroit.
“We believe Richfield offers the best option for our new tech centre,” Lee said. “In addition to that, to do business with our OE customers, including FCA, we need to travel to Detroit. This area has very easy access to Interstate 80. We can save more than an hour both ways compared to our competitors.”
Nexen's Richfield Village centre is its only research and development facility in the US, and the company currently does not manufacture tires in the region. It operates two tire plants in South Korea and one in Qingdao, China. The firm reported 2014 sales of $1.68 billion.
In July, Nexen received approval from the European Commission to receive nearly $128 million in aid to build a third tire plant in Zatec, Czech Republic. The commission's 23 July release said the tire facility will create at least 1,000 new jobs in Zatec. The plant will be built on about 2 million square feet of land and represents about a $907.3 million investment.
Nexen's European factory is projected to begin operations in 2018 and eventually produce 12 million tires per year.
The firm disclosed plans to expand its facility eventually in Seoul, South Korea, to 10 million square feet and eventually produce 35 million tires per year there. The plant is 5.2 million square feet and produces about 11 million units per year with 1,200 employees.