Kumho Tires mulls US$100 million for expansion
Seo Han Chang told the DaU, ly at the Vietnam International Shop+Franchise Show 2011 that his company would spend the sum to double output to six million tires a year from the current three million products to supply local and global markets.
The additional investment will raise the company’s total capital in the factory to US$300 million, in line with its initial goal to invest US$500 million in Vietnam to boost output to 13 million auto tires of various types.
General Director Chang said the increased output is aimed to meet the increasing demand for auto tires on the global market.
The company decides to boost production in Vietnam to make use of the ample rubber supply in the local market, while output at Kumho’s other factories in South Korea and China will remain unchanged, Chang said. Kumho Tires currently operates three factories in South Korea and four factories in China.
Kumho Tires Vina supplies the local market some 200,000 tires a year, and the company is seeking to boost sales on the local market by looking for more sales agents and promoting the franchising business here. The company currently has 13 franchisees in the local market, and is eyeing 30 such shops in the near future.
Vietnam’s tire and inner tube industry is still small-sized, and is limited to just a few companies like Casumina, Sao Vang, and DRC, but the majority of products are for motorcycles rather than automobiles. Therefore, the local demand is largely satisfied by imports, which most of local rubber is export as raw material.
