Kumho expands American plantKumho Tire, the nation’s second largest tire manufacturer, said yesterday it is resuming construction of its plant in Georgia to expand its presence in the North American market.
The subsidiary of Kumho Asiana Group, which is under a debt workout program, said it is investing $413 million to finish construction of its plant in Macon, Georgia, by 2016 after creditors approve the plan.
The company had a groundbreaking ceremony for the plant in 2008, but since the tire manufacturer went into a debt workout program in 2009, construction was halted.
The situation for Kumho started to improve with net profit reaching more than 100 billon won ($98 million) for each of the last two years. Industry insiders expect the company to come out of its debt workout program within this year.
The tiremaker said the Georgia plant will have annual production of 4 million tires and once expanded, Kumho’s overseas production capacity will exceed domestic capacity.
“About 1.6 billion tires are sold in the global tire market and the North American market accounts for 20 percent of them,” Kumho said in a statement. “North America is also an important premium market and having a production base there will help build our relationships with automakers.”
Kumho is already the largest local supplier to Hyundai’s plant in Alabama and Kia’s plant in Georgia. Hyundai’s plant is 296 kilometers (183 miles) away from Kumho’s plant, while Kia’s is only 177 kilometers away.
According to the U.S. Rubber Manufacturers Association, the North American tire market is expected to grow by 5 percent annually from 2013 to 2018.
“The southern area in the U.S. is referred to as a new mecca of automobiles as global automakers are forming a cluster,” the company said.
By joo kyung-don [email@example.com ]
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