(Akron/Tire Review) Few people know that South Korea’s Kumho Tire started as a taxi company back in 1946. To celebrate its humble beginnings, Kumho recently purchased two 1933 Ford sedans, similar to those that the now international firm began with.
The cars are on display at Kumho Asiana Group’s headquarters in Yongin.
A report in the Korea Herald says that Kumho Tire Co expects to complete expansion at its tyre plant in Nanjing, China, in mid-April rather than at the end of 2005 as was previously thought. Originally the company had planned to quadruple production to 12.6 million units, the early conclusion of its plans could suggest that it has reduced this target. In addition, Kumho plans to break ground for a new $184 million tyre plant in Tianjin, China, its second in that city. Plans call for that plant to be on stream in 2007, Tire Review reports
In an exclusive interview with Tire Review last week, Tom Dattilo, chairman, president and CEO of Cooper Tire & Rubber, said the tyre manufacturer ended up paying “about $107 million” for its 11 per cent stake in Kumho Tire Co.
Cooper purchased the stock during Kumho’s dual initial public offerings on the London and Seoul exchanges earlier this year. “That was our 11 per cent stake. I saw a set of figures last week that put it at about $110 million, and we had expected it to come in at the low to mid $140s. A couple of analysts were speculating $140, 150, $160 million, but that was all part of the process of trying to get as high a price as they could,” Mr Dattilo told the magazine.
Kumho Tire made its official debut on both the South Korean and London stock exchanges on Wednesday. The South Korean tyre maker launched simultaneous initial public offerings of its stock earlier this month, and began active trading yesterday.
On its first trading day on the London exchange, Kumho’s share price closed at £7.92, up six per cent from its IPO pricing.
Kumho will launch initial public offerings (IPO) on both the South Korean and London stock exchanges at $15.58 per share, South Korea’s Dow Jones has reported. The tyre manufacturer expects to raise approximately $400 million (£210 million) in the sale. Kumho Tire Co. is said to be selling some 25 million shares in the simultaneous IPO. “A heavy flood of orders is expected to be placed before the offer close,” Dow Jones reported.
The news follows Cooper Tire & Rubber’s early January announcement that it would buy an 11 per cent share of the company, which amounts to 7.5 million shares.
Kumho Tyre has announced that Steve Tidmarsh has been appointed as managing director and chief operating officer of Kumho Tyre (UK). The appointment became effective on 1 January 2005. Following Mr Tidmarsh’s promotion, YD Yoon, president of Kumho Tire Europe, will assume the role of chief executive officer.
Commenting on the appointment, YD Yoon said: “Under Steve’s leadership I am certain that our team at Kumho Tyre (UK) will be in excellent shape to meet the challenges of the UK and Irish markets. His energy and drive will be invaluable as we move ahead with our strategic plans for Europe.”
Steve Tidmarsh joined Kumho Tyre (UK) in December 2002 as sales director, becoming executive director in 2004.
Lee Hoggett, aka DJ String, was the winner of a £20,000 Hyundai Coupe in a nationwide competition organised by Kumho. Kumho UK managing director, Steve Tidmarsh, presented the prize at the Huntingdon Performance Tyres of Godmanchester – the ECSTA centre where Lee Hoggett originally entered the draw. The car, a top-of-the-range 2.7 litre V6 model was fitted with 18 inch Mille Miglia EV-R alloy wheels.
The South Korea monopolies commission has said it will fine Hankook Tire and Kumho Tire 4.1 billion won (£2.1 million), Korean newspapers have reported. The Fair Trade Commission (FTC) said the two companies had raised the prices of products shipped to their distributors after consulting each other, violating the country’s fair trade act.
The fines break down to 2.2 billion won for Hankook and 1.9 billion won for Kumho. The ruling comes after both companies raised their prices by between five and 10 per cent in May 2004, on the pretext of higher international rubber prices. The FTC is reported to have said both companies have admitted to the violations and provided evidence, entitling them to reduced fines under the government’s leniency program.
Cooper Tire & Rubber has announced that it has agreed to acquire approximately 11 per cent of the common equity of Kumho Tire. Cooper reports that the acquisition is in connection with a planned initial public offering on the London and Korean stock exchanges. The deal, which is expected to close in the first quarter of 2005, remains subject to a number of government and regulatory approvals.
Kumho Tire is to join the American Le Mans Series (ALMS) this year, as a race tyre supplier, according to American news source Tire Business.
The company will begin both tyre testing and the selection of a racing team this month. The tyre manufacturer is reportedly already in talks with GT and prototype teams.
South Korea’s largest tyre manufacturer, Kumho Tire, is planning a dual stock market listing in Seoul and either New York or London, the Financial Times has reported. Such a move would be worth more than $1.5 billion, according to the newspaper. The listing is expected to take place in the first half of next year.
Kumho is believed to have hired JPMorgan to manage the sale of at least a third of its shares in a move that could raise more than $500 million. One of the company’s major shareholders, the Military Mutual Aid Association (MMAA), owns 50 per cent of the company and stands to make a 40 per cent return on its original investment.
Kumho and JPMorgan have declined to comment.
Kumho Tire Corp has officially decided to take on the challenge of Formula 1, said company president, Sae-Chul Oh, during a Formula 3 Euro Series event.
Nick Gregg, group managing director at ATS Euromaster, has been appointed to join the Tyre Industry Council later this year, strengthening the retail representation on the Council.
The TIC claims that its tyre safety work is expanding, particularly in the area of tyre safety clinics and roadside tyre checks, and so welcomes the support from retailers as well as tyre manufacturers.
Kumho Tire USA Inc is to increase prices on all of its tyres, effective of the 1 October.
Prices of the company’s passenger, light truck and commercial truck tyres will increase anywhere from three per cent to five per cent, depending on the model.
David Hudrlik, vice president and director of sales, referred to escalating raw material prices and rising shipping costs as the reasons for the increase. The company gave the same reasons for increasing its tyre prices in May.
In Korea, Kumho has given in to demands from its union to change the status of 282 part time workers to become full time staff. 360 out of a total of 427 unionised workers at the two plants in Kwangju and Koksong voted for the change, which the company estimates will increase labour costs by 30 per cent.
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