Kumho Plans Third Chinese Plant
Kumho Tire Co is planning to set up its third production plant in China, the company has reported. The move will reportedly go ahead in partnership with China’s largest vehicle manufacturer, China FAW Group Co (FAW). Kumho plans to build the production plant in the Chinese northeastern city of Changchun with an investment of $150 million.
The Asia Pulse news agency has reported that Kumho is responsible for 90 per cent of the investment, while the rest is to be funded by FAW. Kumho and FAW are said to have signed a memorandum of understanding and plan to conclude a formal agreement in October. Construction of the plant is scheduled to start early next year and is expected to be completed in 2007.
The Changchun production plant is projected to have an annual production capacity of 3.15 million tyres, with the output of the plant to be shipped out to FAW and China’s northeastern market.
“With three production plants in China, we have secured our position there, but this is just a stepping stone to become a global production plant,” said Oh Sae-chul, CEO of Kumho Tire.
Kumho’s two existing production plants in China are in Nanjing and Tianjin. The South Korean company enjoys a leading 20 per cent market share in southern China.
Kumho, currently ranked as the world’s ninth largest manufacturer, is aiming to rise to eighth place by doubling its capacity between now and 2009.