Kumho eyes wider R&D co-op with Yokohama

SEOUL, South Korea (May 22, 2015) — South Korea's Kumho Tire Co. Inc. is looking to extend its technical partnership with Yokohama Rubber Co. Ltd. to include supplying the Japanese tire maker with OE tires from its Chinese factories, Kumho disclosed recently.

The two companies have been co-developing “next-generation” tires after entering into a strategic research and development alliance in May last year.

“Negotiations are under way on issues including specifications, volume and start of shipment,” Kumho said. “We will consider gradually expanding shipment volume depending on orders secured by our plants in China and the demand for OEM products.

“We can start delivery as early as this year, if we make rapid progress on the negotiations.”

Kumho said the deal, which is yet to be finalized, would help it raise utilization rates of its plants in China.

“Amid concerns that this year might see global tire makers struggling to fill idle capacity in China with U.S. authorities expected to slap anti-dumping duties on tires made in China, Kumho could use the potential OEM deal to bolster its ties with Yokohama as well as to increase the utilization of its Chinese factories,” the Korean company said.

Yokohama did not comment separately on the negotiations.

Kumho has five plants in China — in Changchun, Longhai/Fujian, Tianjin and two in Nanjing — and is in the process of relocating its Nanjing factories to an economic development zone in Pukou, a district in Nanjing.

The company expects the new factory, combining the separate passenger and truck tire plants, will be in operation by next year.

Kumho also brings stepped-up R&D resources to the pact via the $90 million research and development center it opened in 2013 in Yongin City, South Korea.