Kumho Tire Co. Inc. will share its tire manufacturing technology with a battery maker in Pakistan that wants to build tires. As part of the agreement, Kumho will be paid $5 million, plus 2.5% of Century Engineering Industries Pvt. Ltd.'s annual sales. The 10-year contract, effective from September 2018 through the last day of September 2028, requires Kumho to share technology from 28 tire products for both passenger and commercial vehicles. It entails design and quality control, as well as education and the ins and outs of running a tire manufacturing business.
Century makes Phoenix-brand batteries, and says it has the capacity to build one million batteries a year, and has original equipment orders for vehicles in Pakistan. The company wants to expand its business to include tire manufacturing.
According to a news release from Kumho, "Century will improve upon Pakistan’s limited infrastructure for tire manufacturing by investing in a tire plant with hopes to successfully expand its business in the automotive industry. Forecasting to starting with a million tires per year, Century is aiming to eventually grow its annual capacity to 5 million units."
Kim Jong-ho, CEO of Kumho, says, “Kumho has enjoyed a good reputation as a technology powerhouse. The deal will eliminate concerns caused by some issues over the years such as its acquisition by Doublestar and prove that Kumho’s quality and technology remain intact. We will leverage this deal as a starting point to establish technology the transfer as a new revenue source and develop a variety of business models that build on our expertise in tire manufacturing in order to further enhance our business.”
For information about Kumho's business in the U.S., visit www.KumhoTireUSA.com.
