Kumho Tire, South Korea’s second-biggest tyre maker, reportedly said on Monday it may build a plant in Vietnam as part of plans to expand outside its saturated domestic market.
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Like other tyre makers, Kumho is also facing tough global market conditions because of higher raw material costs and a supply glut of tyres, as well as stiff competition with global rivals, Reuters noted.
“We are considering building a new tyre plant in Vietnam, but nothing has been decided,” the company said in a filing to the Korea Exchange cited by the news agency.
A Kumho spokesman told Reuters that the new plant, if it went ahead with the plan, would be part of the company’s goal to boost its annual production to more than 50 million tyres by 2007. It did not provide its current output capacity.
In comparison, Hankook Tire Co. Ltd. , South Korea’s top tyre maker, is currently producing 58 million tyres a year, the report noted.
Reuters saud Kumho, which staged a US$363 million initial public offering in South Korea and London last February, has three plants in China, two of which are under construction, and another three in South Korea.
Hankook Tire is due to start production at its new factory in Hungary in the second half of 2007, the report added.
