To Expand Plant in Vietnam
Kumho Tire's Chinese parent company, Doublestar, will make an additional investment in the tire maker’s Vietnamese production subsidiary.
Doublestar plans to acquire a 42.4 percent stake in Kumho Tire's Vietnamese production subsidiary for US$92.3 million, according to a semiannual report released by Doublestar on Aug. 31. Kumho Tire is planning to accelerate the completion of the plant with the investment cash.
Kumho Tire decided in March to invest 339.8 billion won to expand its plant in Vietnam. The Vietnamese factory is Kumho Tire's fourth overseas production base and can produce 5.5 million tires per year. The tire maker will expand the plant’s production capacity by 3 million units of tires for passenger cars.
The plant in Vietnam is an outpost for Kumho Tire's expansion into the global market. The U.S. Department of Commerce confirmed a tariff of 21.74 percent on Korean-made tires in June, but it applied a lower tariff of 7.89 percent to tires from Kumho's Vietnamese plant. The company can save not only labor costs but customs costs by exporting tires from Vietnam to the United States
Kumho Tire is also in the final stage of expanding its Georgia plant in the United States. The expansion will lead to additional production of 500,000 tires per year. The Georgia plant will be able to roll out a total of 4.5 million tires per year.