On June 28, 2007, the Kumho Tire Vietnam Natural Rubber Plant was officially completed in Vietnam. Attending the completion ceremony were more than a hundred relevant individuals including Wu Se-zhe, President of Kumho Tire, the Governor of Binh Duong Province in Vietnam, and the President of the Association for Trade, Investment, and Development. It is understood that after the plant begins production, it will supply natural rubber raw materials to Kumho Tire's four plants in China, effectively controlling the supply and demand links of tire production materials, reducing the risks brought by sharp increases in raw material prices, stabilizing product prices effectively, and improving the quality of Kumho Tires.
The Kumho Tire Vietnam Natural Rubber Plant is located within Bin Giang County of Binh Duong Province. The total investment reaches 4 million US dollars, with the factory covering an area of 82,645 square meters. In the first phase, it will reach an annual production capacity of 11,000 tons of natural rubber raw materials, which is sufficient for the production needs of approximately 6 million tires. In the future, it will gradually expand production capacity according to the needs of Kumho Tire's business development, enhancing the quality of Kumho Tires.
Natural rubber is the main raw material for tire production, accounting for about 25% of the important share of tire materials. However, in recent years, the price of natural rubber has shown a continuous upward trend. According to prices released by the Singapore Commodity Exchange, the price of natural rubber increased from $1,004 per ton in 2003 to $2,100 per ton in June 2007, an increase of more than double, seriously affecting the profits of the tire industry and constraining its development. Tire companies have had no choice but to seek alternative solutions. Currently, only a few international tire giants, including Michelin and Bridgestone, have established natural rubber plants in Southeast Asia, where natural rubber production is abundant, to meet their own production demands.
Kumho Tire revealed plans to establish a natural rubber plant as early as October 2006 when its Vietnam factory was just being laid down. The completion of the Kumho Tire Vietnam Natural Rubber Plant signifies the beginning of a new era of raw material supply for Kumho Tire, making it the first in Korea's tire industry to self-supply raw materials. Wu Se-zhe, President of Kumho Tire, stated: "Establishing a natural rubber processing plant in Vietnam not only meets the raw material supply needs of local tire plants in Vietnam but also supplies natural rubber raw materials to other overseas factories such as those in China, achieving dual purposes of controlling raw material quality and reducing costs, better improving the quality of tire products."