SEOUL, South Korea (June 22, 2005) — Kumho Tire Co. Inc. has broken ground on a second tire plant in China, to be built near Tianjin with initial annual capacity of 5 million passenger and light truck units when it comes on stream in 2007.
The factory, which will be expanded to 12.5 million units annually long-term, is being built in the Tianjin Economical Development Area (TEDA), located between the city of Tianjin and Tianjin Port. The project carries a price tag of $185 million, according to press reports in China.
The new plant will complement Kumho's existing tire plant in Nanjing, where a project to double capacity was completed recently. The two plants together would make Kumho one of the largest Chinese tire makers, with an estimated 18 million units of annual capacity by 2007 and up to 24.5 million units longer term. TEDA is a minority investor in the Tianjin plant.
This is Kumho's second go at a plant in Tianjin. The firm operated a commercial vehicle tire plant there from 1995-99 but sold that unit to Bridgestone Corp. in 1999 in the midst of negotiations to find an industrial partner.
Kumho President and CEO Sae-Chul Oh said earlier this year the company intends to become the No. 1 replacement brand in China by next year, targeting a 15-percent passenger tire market share by then.
Kumho doubled annual production at Nanjing to 11 million units by constructing what amounts to a second factory on the grounds of the existing 7-year-old plant.