Hiho Metal primarily engages in aluminum trading and sales. They have used their aluminum business and expanded into wheel manufacturing through their subsidiary, Hiho Wheel.
Hiho Wheel now has operations in China and Mexico and works with auto manufacturers, including Nissan, Volkswagen, Subaru, and Chrysler.
The opportunity
Hiho Wheel was eager to tap into opportunities in North America by expanding into Mexico, a key global hub for auto manufacturers. Mexico is experiencing growth due to nearshoring, its advanced infrastructure and strong connectivity with the US, which is bolstered by the United States-Mexico-Canada Agreement. Many leading auto manufacturers now have plants in Mexico, and component companies have followed.
To support Hiho Wheel’s operations in Mexico, the Group needed initial financing to build the new plant, as well as access to local banking facilities. Although Hiho Group planned to establish a treasury function in Mexico, Hiho Metal’s CFO oversees all financial flows and funding for the Group, making it crucial to maintain visibility and control of activities in Mexico at headquarters. Another consideration was Hiho Wheel’s ambitious project timeline.
The solution
When choosing a bank to work with in Mexico, Hiho Wheel decided that working with a global bank would provide the best connectivity and enable visibility, control, and consistency across its global operations. Hiho Wheel selected Citi due to its international presence and range of financial solutions.
The financing facility was fully backed by Korea Trade Insurance Corporation (K-Sure), the official export credit agency (ECA) of South Korea, to help construct the new plant.
Citi opened payments and collections accounts for Hiho Wheel Mexico, set up treasury structures to facilitate cash and liquidity management, and worked with its treasury team to deploy FX solutions – all accessible within the CitiDirect platform.
The result
Hiho Wheel opened its new plant for producing aluminum wheels for the auto industry in Apaseo El Grande, Guanajuato, in 2023. Timely ECA financing facilitated by Citi ensured that the tight deadlines for construction and opening were met.
The project's success has strengthened the relationship between Hiho Group and Citi.
“We have built strong relationships and connectivity with Citi at our headquarters in Korea and through our treasury team locally in Mexico,” says Kwangseob Lee, President of Hiho Wheel Mexico. “Citi goes the extra mile and has a personal touch: recently, the head of Citi Commercial Bank for Korea visited our plant in Mexico, while the Citi head of multinational companies in Mexico came to our headquarters in South Korea. That level of commitment to understanding our objectives and growth ambitions is greatly appreciated by Hiho Wheel and the entire Group.”
