MACON, Ga.—Kumho Tire Co. Ltd. has broken ground on a $165 million tire plant in Macon and a $67 million research and development center in South Korea—both of which will play key roles in the firm's international growth plans.
Kumho and Georgia government officials gathered May 12 at a site in Bibb County, Ga., to break ground on a 5.7 million-sq.-ft. tire plant designed with an initial annual capacity of 2.1 million passenger tires. It is expected on stream by year-end 2009 with about 200 employees.
The groundbreaking went ahead despite heavy storm damage in Macon and Bibb County from a series of tornados that struck the area May 11, according to a spokesman for the Macon Economic Development Commission.
A second-phase expansion—slated for completion by 2011—would boost capacity to 3.15 million tires and create 200 more jobs at an additional cost of $60 million, the company said previously.
Georgia Gov. Sonny Perdue and Sae-Chul Oh, Kumho Tire president and CEO, led the ground-breaking ceremony, which was attended by more than 300 individuals, including local and state government officials, Kumho Tire executives and journalists. The site is located on 127 acres in Sofkee Industrial Park just south of the Macon city limits in southern Bibb County.
“Establishing a production facility in the world's biggest tire market will help Kum- ho respond faster to the needs of cus- tomers in the region, while also reinforcing our cost and price competitiveness,” Oh said. “We can now provide our … tires to U.S. consumers and an ever-growing number of major car makers faster than ever.”
This plant will expand to nine the number of Kumho factories worldwide—three in South Korea, four in China and one in Vietnam, which began operations in March. Kumho's fourth facility in China, for truck/bus radial tires, still is under construction in Nanjing.
By year-end, Kumho's production capacity outside of South Korea will reach 33 million tires, exceeding domestic production of 32 million tires. By the end of 2009, Kumho's worldwide capacity, boosted by the plants in Nanjing and Georgia, will rise to 77 million tires.
Others who attended the ceremony included: Sam-Gu Park, chairman & CEO of Kumho Asiana Group; Ken Stewart, Georgia Department of Economic Development commissioner; and Charles Bish- op, Macon-Bibb county chairman.
New R&D center
Kumho's other groundbreaking was three days later in Young-In, South Korea, where the company intends to build a 374,900-sq.-ft. R&D center, which will serve as a coordinating hub for Kumho's research activities in other centers in the U.S., United Kingdom, China and South Korea, the tire maker said.
The center will house a chemical laboratory and facilities for analyzing tire compounds, noise and vibration, and provide a foundation for the company's plan to double the size of its research staff to 1,200 by 2015.
“Innovation is at the heart of our competitive advantage, and this state-of-the-art facility will strengthen our global research and development network and propel us toward our goal of becoming one of the world's top five tire manufacturers,” Oh said. “The Kumho R&D center will help us attract top scientists and engineers, who will develop creative products that fit our customers' needs.”
The facility also will be certified by Korea's Housing & Urban Research Institute as a “green” building. This designation is given to facilities that are built according to strict environmental impact, energy usage, nature conservation and carbon footprint guidelines.
Kumho also has inaugurated production at a $200 million car and light truck tire plant in Binh Duong, Vietnam, and disclosed plans to expand the factory's capacity nearly fourfold as market conditions warrant.
The 3.4 million-sq.-ft. plant near Ho Chi Minh City is part of Kumho Tire's global strategy and is expected to play a significant role in the company's activities in the ASEAN (Association of South East Asian Nations) market, which includes Vietnam.
Kumho said tires produced at the factory will be sold in Vietnam and other ASEAN countries, taking advantage of reduced tariff barriers within that trading bloc. The company also plans to ship light truck tires to the Americas and Europe.
The plant comes on stream with initial capacity of 3.15 million tires a year, which Kumho said could expand to 13 million units “based on the analysis of future market conditions.”
The company did not disclose a time frame for that expansion. The firm broke ground on this plant in the second half of 2006.