Completion of Kumho's plant in US to be delayed

By Gary Anglebrandt, Crain South Korea correspondent

Seoul, South Korea -- Blaming a lagging global economy and faltering US auto industry, Kumho Tire Co. Ltd. has postponed completion of its first US plant, to be built in Georgia.

Executives from Kumho and Georgia government officials had gathered May 12 at a site in Bibb County, Georgia, to break ground on the $165 million tyre plant, which is expected to have an initial annual capacity of 2.1 million passenger tyres.

The 53 hectare factory, to be operated by the tyre maker's US unit, Kumho Tire USA Inc., had been expected to be on stream by year-end 2009. Local media reports said it was expected to employ about 450 workers.

However, Aleuna Lee, a client executive for Burson-Marsteller Korea,, Kumho's public relations representative, said in a statement that the tyre maker “has extended the timetable for completion of its plant in Bibb County, Georgia, but we are still committed to this project, which will help us better serve customers in North America.”

“Our strategy is to remain flexible to changes in market demand and allocate production resources accordingly. Kumho will continue to closely watch the North American automotive market to help us effectively compete. Kumho Tires will keep all of our stakeholders up to date with the latest information available on this plant.”

In a follow-up phone interview with ERJ, Ms. Lee said the original date for opening the factory has been postponed but a new date is still up in the air.

She cited the downturn in the US auto market as a principal reason for postponing the plant's completion, noting that the weakened Korean currency, the won, has nothing to do with Kumho's decision and has no bearing on the factory's construction because Kumho has dollars from its US sales.

A local media report in Georgia said workers were recently continuing to build a truck parking lot at the new plant site.

From Tire Business (A Crain publication)