AKRON (Jan. 22, 2002) — The sale of Kumho Industrial Co.'s Kumho Tire unit could take place by the end of March to a group that includes the South Korean military pension fund and foreign investors, according to Kyu S. Cho, president of the company's U.S. unit, Kumho Tire U.S.A. Inc.
This follows the breakdown in negotiations late last year to sell the unit to an investors' consortium involving JP Morgan Chase & Co. and Carlyle Group.
Mr. Cho told Tire Business that once the deal goes through it will provide an infusion of capital allowing the expansion of Kumho's tire making capacity, first in South Korea and then in China.
“This is the biggest obstacle to the expansion program,” Mr. Cho said.
Kumho Tire U.S.A sources 95 percent of its tires from the parent company's plants in South Korea and 5 percent from its factory in China, so the added capacity, especially in South Korea, should help improve supply to the U.S, he said.
As far as sourcing tires from China, he said until the expansion of the plant there is completed, it would be very difficult to get product because the Chinese market is booming.