BENCAT, Vietnam (Aug. 13) — Kumho Tire Co. Ltd. has opened a $4 million rubber processing plant in Bencat to help it source processed natural rubber for its tire plants in South Korea and China.
"By setting up a rubber processing plant in Vietnam, Kumho Tires will be able to provide raw material for tire manufacture not only in Vietnam, but also in Korea and the rest of the world," said Kumho Tire CEO Sae-Chul Oh in a prepared statement.
Kumho marked the recent opening with a ceremony at the plant, in Binh Duong Province, with local dignitaries and Kumho executives present.
The plant covers about 21 acres and has an annual production capacity of 11,000 metric tons, enough to make 6 million tires. Depending on its performance, Kumho plans to build more plants in the same location in the future, the company said.
Kumho also is building a $155 million tire plant in Vietnam, near Ho Chi Minh City, due on stream in the first half of 2008.
Kumho anticipates that the new plant will aid in countering rises in the cost of raw materials required for tire manufacture and help stabilize the price of its tires as a result.
Natural rubber makes up as much as 25 percent of raw material used in tire manufacturing, Kumho said. According to Singapore Commodity Exchange Ltd., the price of natural rubber rose from an average of $1,004 dollars per metric ton in 2003 to more than $2,100 this past June.