Kumho considering new tyre plant in US

By Bruce Davis, Crain Communications

Las Vegas, Nevada - South Korea´s Kumho Tire Co. Ltd. is evaluating sites in the US for a passenger/light truck tyre plant that could be operating as soon as 2009, according to Kumho Tire CEO Sae Chul Oh.

Despite having new plants under construction in China and Vietnam, Kumho still needs additional capacity, said Oh. He said the company is especialy interested in larger diameter high-performance and sport-utility-type vehicles. Capacities at the Chinese and Vietnamese plants are being designed more for their respective domestic markets, he said in an interview during the Speciality Equipment Market Association (SEMA) Show in Las Vegas.

Kumho is evaluating a number of sites in the US for a plant, Oh said. Georgia appears to be the leading candidate, as officials from Kumho Tire and its parent company, Kumho Asiana Group, have met multiple times with officials in Georgia, including Georgia Governor, Sonny Perdue.

Kumho officials expect to reach a decision on where to build the plant by early next year, Oh said.

The new plant would be modular in design and highly automated using proprietary Kumho technology, Oh said. It probably will have a daily capacity of 6000 to 9000 tyres at startup. The plant's technology would be more advanced than that which Kumho uses in its Automated Production Unit plant in Pyeongtaek, South Korea.

Once Kumho finds a site that meets its selection criteria, Oh said, construction would start as soon as possible. Based on the pace of construction at the firm's newest plants in China and Vietnam, production could start as soon as 12 to 18 months later.

Oh said site selection depends on a number of factors, including: distance from factory to customers; cost of labour; availability of a skilled/trainable work force; and market size. Obtaining original equipment fitments also would play a role in the decision, he said.

Oh did not say what Kumho would budget for a factory, but it is spending $155 million for the plant in Vietnam and $150 million for the plant in Changchun, China, that is undergoing trial production now.

Kumho might consider building a plant in Europe as well, company officials said, but a project of that nature is still several years away. 

Picture: From left, Kumho Tire Co. Ltd.´s Hae Dong Oh, senior vice president, marketing; Sae Chul Oh, CEO; and Kumho Tire North America´s CEO and President B.K. Kim. photo: Crain Communications

From Tire Business (A Crain publication)