The Building Of Kumho’s Ninth Factory Has Begun
Kumho expects to invest a total of $165 million in this 5.7 million square feet factory, which is slated for completion by the end of 2009. It will feature state-of-the-art automated facilities for optimum quality control. The initial capacity of 2.1 million tyres will supply original and replacement equipment markets in the USA. However, Kumho will consider further expansion of the facilities if sufficient demand exists.
The official sod turning ceremony for the factory was held on May 13 and attended by approximately 300 people, including Kumho executives, US state government officials and key members of the media.
Sae-chul Oh, President & CEO of Kumho Tires said at the ceremony, “Establishing a production facility in the world’s biggest tyre market will help Kumho respond faster to the needs of customers in the region, while reinforcing our cost and price competitiveness. With the factory complete, it will be possible to provide our high quality tyres to US consumers and an ever growing number of major car makers faster than ever before.”
He added, “The plant will further strengthen Kumho’s global network, better positioning us to achieve our goal of becoming one of the world’s top five tyre companies by 2015.”
With the completion of the new factory, Kumho will have a total of nine manufacturing plants strategically positioned around the world. It has three in Korea, three in China and one in Vietnam, which began operations in March this year. A further plant is being constructed in Nanjing, China to produce radial truck and bus tyres.
By the end of 2008, Kumho production capacity outside of Korea will reach 33 million tyres, exceeding its domestic production currently running at 32 million tyres. The new plants in Nanking and Georgia will further increase Kumho’s global production capacity to 77 million tyres by 2009.
The American tyre market is currently the world’s largest, with 45.1 million high performance tyres sold every year. It is very important for Kumho’s strategic growth plans, as 35 per cent of the company’s overseas sales come from the USA. Sales of high performance tyres have grown 53 per cent since 2002, and these make up 23 per cent of the entire American tyre market. Kumho has a six per cent share of the US high performance sector.
The company’s new plant in Georgia and the increased sales of its ultra high performance tyres will bring Kumho closer to its goal of becoming one of the world’s top five tyre companies in both sales and brand value.