Kumho Tire to pay Kumho to use Kumho brand

Kumho Petrochemical, an affiliate of airline-to-construction conglomerate Kumho Asiana Group, will receive a payment for the use of the Kumho badge from Kumho Tire, the tiremaker said Thursday.

In April, Kumho Tire and its creditors signed a deal with Qingdao Doublestar to sell the Korean tiremaker’s 45 percent stake to the Chinese tire company for 646 billion won ($605 million). Back then, Kumho Tire agreed with Kumho Petrochemical and Kumho Industrial to make a payment for the use of the Kumho logo for five years as part of the deal, a Kumho Tire spokesman said over the phone.

For five years from April, Kumho Tire will pay 0.05 percent of its overall annual sales to Kumho Industrial on a quarterly basis. Kumho Tire will make the same payment to Kumho Petrochemical, he said.

Kumho Tire posted sales of 2.876 trillion won in 2017.

By acquiring Kumho Tire, Doublestar aims to seek co-prosperity and to become a global top-10 tiremaker through close cooperation.

Kumho Tire will focus on mid-range and high-end tires for passenger vehicles, and Doublestar will focus on mid-range and low-end tires for trucks and buses, Doublestar Chairman Chai Yongsen told reporters in Seoul in March.

Kumho Tire will operate as an independent business entity in Korea, as Doublestar has no intention of controlling or intervening in the making of major decisions at the tiremaker, he said.

Kumho Tire has eight plants - three in Korea, three in China, one in Vietnam and one in the United States - with a combined production capacity of 54.64 million tires.

Yonhap