NANJING, China (Jan. 13, 2004) — Kumho Tire Co. Inc. is building a second tire plant in China, adjacent to an existing plant in Nanjing, that will double annual production capacity in China by 2008 to 10 million units.
The $130 million project, already under way, will provide Nanjing Kumho Tire Co. Ltd. with additional capacity for its drive to increase its share of the passenger radial market in China to 25 percent, according to Kumho.
The new factory is being built adjacent to the existing Nanjing Kumho tire plant, which started production of car and truck/bus tires in 1996. Kumho is majority owner of the venture, along with Chinese investors.
Of the $130 million investment, the World Bank's International Finance Corp. (IFC) has agreed to invest about $32 million in the form of loans and direct investments.
Parallel to the expansion project, Nanjing Kumho is setting up distribution hubs in northern China, where it previously had not been allowed to compete according to the terms of its 2000 sale of Tianjin Kumho Tires to Bridgestone Corp.
The World Bank also was involved in financing and arranging financing for the existing plant. Nanjing Kumho's sales in 2002 were about $115 million, according to the IFC.
The project is separate from a new plant Kumho opened recently in Pyeongtaek, South Korea, using proprietary automated technology.