Prominent Kumho Stand Reaches International Audience

Displaying a wide range of its products on its generously proportioned stand near the main entrance in Hall 3, Kumho marketing manager Wolf Fuder said the Korean manufacturer had experienced a similar level of traffic at its stand to that in the pre-recession year of 2008. However, the make-up of the visitors was different; Fuder commented that there were “more international guests” and fewer from the domestic German market.

“Many [visitors] were interested in truck tyres and the standard PCR tyres and almost nobody in eco tyres,” noted Fuder, suggesting that the ecological feature played up by many exhibitors had perhaps been a little overstated. “Of course many were interested in the aroma and smoke tyres”, though the purpose of these tyres is the curiosity they generate rather than for commercial purposes.

Kumho has recently come out of what could euphemistically be called an interesting period in its history – the Korea Development Bank led a band of Kumho creditors signing a 1.2 trillion won ($1.08 billion) agreement in April with the purpose of providing “Kumho the momentum to turn its business around,” according to Ahn Yang-Soo, the bank executive in charge of Kumho’s debt. The company’s 2009 financial information showed a net loss of 776,168 million won, some 287 per cent more in the red than the previous year and a loss 3,190 per cent greater than in 2007.

Kumho’s proposed restructuring plan, including a cut in wages and bonuses, was accepted by workers on 21 April, which – according to information published by the Wall Street Journal – paved the way for a 10 per cent reduction in salaries for 2010 and a further five per cent reduction before Kumho’s exit from a debt-rescheduling programme in some two to three years’ time. In return, Kumho has withdrawn plans to lay off or outsource around 1,200 workers.

The measures seem to have had a short-term effect – the manufacturer turned a profit during the opening quarter of the 2010 financial year, posting sales of KRW 586.4 billion (₤343.8 million), representing 27.7 per cent quarter on quarter and 18 per cent year-on-year growth. Operating profit during the three months to March 31, 2010 amounted to KRW 21.3 billion (₤12.5 million) and net income KRW 20.9 billion (₤12.3 million). The tyre-maker comments that these gains result from an improved plant operation rate and greater export sales.

In the light of this, the fact that Kumho is 50 this year has not yet had much attention; a subtle logo on the company’s stand was the sole reminder, and perhaps a sign of cautious optimism that Kumho’s future is looking rosier than at the beginning of the year.

As Fuder and his colleagues from the UK, Roger Jenkins and Andrew Reeves – managing director and senior PCR design engineer at the company’s European Technical Centre in Birmingham – noted, the real focus of the show was commercial – presenting the array of tyres in Kumho’s range, the high quality performance they offer and the cultivation of relationships with new and existing customers.