SEMA Show, Day Two: Kumho outlines capacity strategy
Dr. Sae-Chul Oh, CEO and president of Kumho Tire Co. Inc., says Kumho plans to increase its worldwide tire capacity by 20% next year.
Part of the increase will come from expanding two of Kumho's three existing plants in China. A fourth Chinese plant is under construction.
Depending on demand and the situation, Oh says the building of a fifth plant in China would be considered. In addition, Kumho says a possible plant in the United States is "under study."
Three years ago, Oh said his goal was to maintain or reduce capacity in Kumho's less profitable Korean factories and increase capacity abroad in order to help reduce production costs. He has done just that.
The building of Kumho's APU (Automated Production Unit) in Pyongtaek, Kyungki-do, Korea, four years ago also helped improve profitability.
The plant can produce two million passenger and light truck tires annually.
Oh says production per man hour is greater in China. Here is a comparison of production at Kumho's factories:
* Korea: 52 kilograms per man hour.
* China: 72 kilograms per man hour.
* APU plant, Korea: 140 kilograms per man hour.
If Kumho ever decided to build a plant in the U.S., it would be automated, says Oh.
Globally, Kumho produces almost 60 million tires a year. Chinese tire production accounts for 28 million of those tires, or 46.6% of the total.
One fifth of all Kumho's tire production is sold in the U.S.