Kumho tyre plant in Gwangju destroyed by fire
South Korean tyre manufacturer Kumho Tire Company Ltd has suspended operations at its main manufacturing complex in the south-western city of Gwangju, following a fire that destroyed major sections of one of the plants. The facility produced high-margin, premium tyres under the Ecsta sports brand.
Deliveries to major automakers are expected to be disrupted as a result, with local reports suggesting that the fire destroyed around 60% of the production lines at one of the two main plants. A spokesperson confirmed that the company will likely need to revise down its 2025 revenue target, having previously forecast a 10% increase in global revenues to KRW 5 trillion (US$ 3.6 billion) for this year. The company’s share price plunged 8% on the first day of trading immediately following the fire.
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The Gwangju plant had a production capacity of 12 million tyres per year, or 20% of the company’s global capacity. The facility was considered outdated, however, and it remains unclear whether the company will rebuild the plant at its existing location, particularly given the recent hike in import tariffs in the US. According to local reports, the company had been looking to relocate the Gwangju operations to a new site in nearby Hampyeong, but with little progress made so far.
The company recently announced it plans to complete construction of a new tyre plant in Europe in the next two years, to supply German automakers including Volkswagen group, Mercedes-Benz and BMW.
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