Kumho Tire to build plant in Europe

In response to an article that The Korea Economic Daily published this morning, Kumho Tire has confirmed that it is considering establishing a new factory in Europe. The company indicates this interest in a disclosure to the Korea Stock Exchange but adds that it has not yet decided precisely how much it will invest in the project, nor its exact timing. Kumho Tire intends to supply further information within the next month.

In its article, The Korea Economic Daily writes that Kumho Tire will invest more than KRW 1 trillion or US$750.8 million to build a European plant that meets demand from major vehicle manufacturers. Jung Il Taik, Kumho Tire’s president and chief executive officer, told the publication that the company is “reviewing Romania, Serbia, Portugal and Turkey as potential locations for the plant.” He added that Kumho plans to complete the site selection process by the end of this year, after “checking subsidies and tax incentives from the federal and local governments.”

Kumho Tire currently supplies European markets with tyres it produces in Asia, but attacks on ships travelling through the Red Sea and Suez Canal have disrupted shipments. The Korea Economic Daily notes that the rerouted journey around the Cape of Good Hope not only takes two weeks longer, but it also increases freight costs by ten per cent.

“We decided to invest in a production facility in Europe as automakers there including three major German companies asked us to build one amid the escalating geopolitical tensions,” Jung told the media site, referring to Mercedes-Benz, BMW and Audi.