Deal Signed – Kumho Coming to America
In ceremonies yesterday, Kumho Tire Co. formally signed an agreement to build a US$225 million tyre manufacturing facility on a 127-acre site in Sofkee Industrial Park in Macon, Georgia. Attending the signing ceremony were Sae Chul Oh, Kumho’s CEO and president; Georgia Governor Sonny Perdue; Ken Stewart, commissioner of the Georgia Department of Economic Development; Macon Mayor Robert Reichert; and Charlie Bishop, chairman of the Bibb County Board of Commissioners.
The first phase of the greenfield plant, said Kumho, will cost $165 million with an annual production capacity of 2.1 million passenger and light truck/SUV tyres, destined for both OE and replacement markets in North America. The second phase will cost $60 million and will raise annual capacity to 3.1 million tyres. The 5.5 million-square-foot plant will feature Kumho’s automated APU manufacturing system, and will eventually employ 450 people.
Kumho said it plans to break ground on the first phase of the plant in May, and production should begin in 2009. The second phase, the company said, is planned to be onstream in 2011. “The U.S. is one of the greatest tyre markets in the world,” said Dr. Oh. “Setting a base of production here will help Kumho gain more market share. This new plant will help Kumho reduce freight costs and will also set up a stronger base for the company to achieve its goal of becoming the fifth largest tyre company in the world by 2015.”
Kumho officials said the decision to place a plant in North America was based on the company’s growth potential, and said that Macon was selected because of its “proximity to transportation and customers,” labor costs and availability, and the incentive package put together by the state and county. The plant will be designed with future expansion in mind, Kumho said, which will be based on market growth. The OE market will be key, Kumho said, as it expects to sell 1.2 million tyres to OE customers in 2008, and twice that in 2009. (Tire Review/Akron)