Hankook Tire takes part in the blockchain-based natural rubber traceability and sustainability project

- PROJECT TREE is the first attempt to establish natural rubber traceability using blockchain
- Hankook will distribute the tires manufactured through the project in the UK market
- Part of the tire sales will be used to fund incentives for cooperating supply chain stakeholders
- Expected to contribute to Hankook Tire’s CSR goal in fostering sustainability across its value chain

Seoul, Korea, December 1, 2021 – Global leading tire company Hankook Tire will participate in the blockchain-based natural rubber traceability and sustainability project called PROJECT TREE. Organized by ITOCHU Corporation, an international trading firm, this is the first attempt to establish traceability using blockchain in the natural rubber industry.

Natural rubber is a primary raw material for tires. The production of tires accounts for about 70％ of global natural rubber consumption, but approximately 85% of global production relies on smallholders in Southeast Asia, mainly in Thailand and Indonesia. It makes it difficult to keep track of and tackle sustainability issues that arise in the procurement process, including deforestation, poverty and the violation of human rights.

With the aim of fostering sustainability across the value chain, Hankook Tire has decided to take part in PROJECT TREE, a project designed to track sourcing natural rubber using a blockchain-based traceability system developed by ITOCHU Techno-Solutions Corporation. The project involves PT. Aneka Bumi Pratama, one of the largest Indonesian natural rubber processing companies, and the use of a smartphone app linked to the system which records information such as date and location of transactions. Through this project, natural rubber produced from raw materials collected outside of conservation areas can be supplied to Hankook. In addition, smallholders without smartphones or bank accounts will be provided with farm tools, fertilizers, and training for better productivity and sustainable practices as well as cash incentives to be paid out under close supervision.

As a strong supporter of PROJECT TREE, Hankook will participate in the project in the UK market in partnership with leading tire distributor European Tyre Enterprise Ltd. (ETEL) which owns Kwik Fit and Stapletons, its retail and wholesale businesses. ETEL is the largest car servicing and repair company in the UK as well as a trusted partner of Hankook. Part of the tire sales will be used to fund incentives for the upstream supply chain stakeholders (smallholders, collectors, local dealers) who cooperate to record their transactions and ensure traceability.

PROJECT TREE is expected to contribute to the CSR policy goals of Hankook Tire. Hankook Tire had established a sustainable natural rubber policy in 2018 and is a member of Global Platform for Sustainable Natural Rubber (GPSNR), an international membership driven platform set up to define sustainability for the natural rubber value chain. Recently, Hankook Tire updated its policy in compliance with the new GSPNR policy across diverse fields such as human rights, environmental protection and management transparency. In order to further improve smallholders’ living standards, upgrade quality of natural rubber and minimize environmental impact, Hankook Tire plans to identify the most suitable cultivation practices and encourage smallholders to receive related training

“As the demand for natural rubber is expected to continue to grow, all stakeholders in the supply chain, including smallholders, tire manufacturers, and end-users, are expected to fulfill their responsibilities,” says Sooil Lee, President and CEO of Hankook Tire & Technology. “Hankook Tire, with sustainability being one of the business priorities, will definitely take the lead in fostering sustainability in procurement of raw materials to create the better world to live in.”

Yasuhiro Takahashi, General Manager of Logistics & Material Distribution Department at ITOCHU Corporation, comments, ““ITOCHU's Brand-new Deal 2023, its medium-term management plan, includes ‘business transformation through the incorporation of consumer needs into products’ and ‘continued contribution to and efforts to achieve the SDGs in its Basic Policies,” adding “ITOCHU will reinforce its natural rubber value chain and hope to contribute to the sustainability of the entire natural rubber industry through PROJECT TREE.”