Kumho Tire_Business Report FY2007
Business Highlights
Highlights
in FY2007
Contracts
-Daimler Benz
The Company will start supplying the SOLUS KH15 (185/65R15) tires for the A-class Benz the same month. According to the Company, no other Korean tire maker has ever won an OE agreement from Mercedes-Benz. (From a press release by the company on Feb. 15, 2007)
-MODEC
The Company will supply the KR03 cargo truck tires to MODEC, a U.K. based manufacturer of electric vehicles. The KR03 tires have passed both safety standard and noise regulations of the EU. Capable of providing stable driving performance and excellent fuel efficiency in high-speed travels, the tires are highly resistant to wear and deliver superior road grip on wet surface. Kumho says that the company intends to maintain its partnership with Modec through joint projects aimed at protecting the environment. (From a press release on May 10, 2007)
New plants in China
- In May 2007, the Company held a groundbreaking ceremony at its Nanjing plant site. The new facility will produce radial tires for trucks and buses.
- In July 2007, the Company held a ceremony to celebrate the completion of its Changchun Plant.
>>> See Capital investment for more details
Reorganizing corporate structure
Kumho Asiana Group announced on May 1, 2007 that it plans to establish a holding company system, and that it has applied the matter to the Fair Trade Committee. Under this project, Kumho Industrial Co., Ltd. and Kumho Petrochemical Co., Ltd. will become the two core holding companies of the group. Kumho Industrial will become the parent body of Daewoo Engineering and Construction, and Asiana Airlines; while Kumho Petrochemical will be the holding corporation of the Company and Kumho Life. (From a press release on May 1, 2007)
Business Plan (FY2008)
The Company announced its financial targets for FY2008, which ends in Dec. 2008. Sales are expected to reach 2,481 billion won, an increase of 22.3 percent year-on-year. Operating profit is projected to surge 73.1 percent to 193 billion won. (From a press release on Mar. 3, 2008)
| Financial Overviews | (in millions of won) |
| - | FY2007 | FY2006 |
Rate of Change |
Remarks |
| Sales | 2,029,308 | 1,813,794 | 11.9% |
Sales for FY20007 - Thanks to increased exports and greater sales of high value-added products, sales reached a record high. - Sales of tires totaled 1,953,295 million won, which accounted for 96.3 percent of the Company's overall sales. - Exports made up 69.7 percent of the Company's total revenue. |
| Operating income | 111,588 | 80,306 | 39.0% | - |
|
Net income |
(24,226) | 970 | - | - The Company posted a net loss due to increases in interest costs, losses from exchange-rate translation, and losses from holdings in companies accounted for under the equity method. |
Contracts
-Daimler Benz
The Company will start supplying the SOLUS KH15 (185/65R15) tires for the A-class Benz the same month. According to the Company, no other Korean tire maker has ever won an OE agreement from Mercedes-Benz. (From a press release by the company on Feb. 15, 2007)
-MODEC
The Company will supply the KR03 cargo truck tires to MODEC, a U.K. based manufacturer of electric vehicles. The KR03 tires have passed both safety standard and noise regulations of the EU. Capable of providing stable driving performance and excellent fuel efficiency in high-speed travels, the tires are highly resistant to wear and deliver superior road grip on wet surface. Kumho says that the company intends to maintain its partnership with Modec through joint projects aimed at protecting the environment. (From a press release on May 10, 2007)
New plants in China
- In May 2007, the Company held a groundbreaking ceremony at its Nanjing plant site. The new facility will produce radial tires for trucks and buses.
- In July 2007, the Company held a ceremony to celebrate the completion of its Changchun Plant.
>>> See Capital investment for more details
Reorganizing corporate structure
Kumho Asiana Group announced on May 1, 2007 that it plans to establish a holding company system, and that it has applied the matter to the Fair Trade Committee. Under this project, Kumho Industrial Co., Ltd. and Kumho Petrochemical Co., Ltd. will become the two core holding companies of the group. Kumho Industrial will become the parent body of Daewoo Engineering and Construction, and Asiana Airlines; while Kumho Petrochemical will be the holding corporation of the Company and Kumho Life. (From a press release on May 1, 2007)
Business Plan (FY2008)
The Company announced its financial targets for FY2008, which ends in Dec. 2008. Sales are expected to reach 2,481 billion won, an increase of 22.3 percent year-on-year. Operating profit is projected to surge 73.1 percent to 193 billion won. (From a press release on Mar. 3, 2008)
R&D
R&D Structure
| Facility | Location | Overview |
| Kumho R&D Center (KRDC) |
Gwangju Korea |
-Year established:
1981 -Developing tires for the domestic and global market |
| Kumho Tire America Technical Center (K.A.T.C) |
Ohio USA |
-Year established:
1990 -Developing tires for the North American OEM market and the aftermarket |
| Kumho Tire Europe Technical Center (K.E.T.C) |
Birmingham U.K |
-Year established:
1997 -Developing high-performance tires for the European market |
| Kumho Tire China Technical Center (K.C.T.C) |
Tianjin China |
-Year established:
2006 -Developing high-performance tires for the Chinese and European markets |
| R&D Expenditure | (in millions of won) |
| - | FY2007 | FY2006 | FY2005 |
| Amount | 58,839 | 57,826 | 51,251 |
| % of sales | 2.90% | 3.19% | 2.89% |
Investment Activities
Overseas
Investments
-China
The Company has held a ground-breaking ceremony at its new tire plant in the Nanjing Koshin Technology Industry Development Area, in Nanjing, China. The 99 million dollar investment will allow the company to make 300,000 radial tires for trucks and buses each year. The new facility to be built on 297,500 square meters of land is scheduled to be completed in the second half of 2008. The addition will increase the company's annual production capacity to 64 million tires. (From a press release on May 16, 2007)
The Company will hold a ceremony to celebrate the completion of its new plant in Changchun, China. The new plant on 220,000 square meter of land in northern China will complement the supply structure of the Kumho Group, which already manufactures tires in Nanjin (southern China) and Tianjin (central China). The Company invested a total of 150 million US dollars in the new Changchun plant, which has the capacity to provide 3.15 million OE tires to China FAW. As the second phase of the Changchun project, it plans to spend additional 108 million US dollars to construct its second plant so as to increase its yearly production volume to 6.3 million tires. The Company will sign a memorandum of understanding on this project with the Changchun Economic and Technical Development Zone. (From a press release on Jul. 26, 2007)
-China
The Company has held a ground-breaking ceremony at its new tire plant in the Nanjing Koshin Technology Industry Development Area, in Nanjing, China. The 99 million dollar investment will allow the company to make 300,000 radial tires for trucks and buses each year. The new facility to be built on 297,500 square meters of land is scheduled to be completed in the second half of 2008. The addition will increase the company's annual production capacity to 64 million tires. (From a press release on May 16, 2007)
The Company will hold a ceremony to celebrate the completion of its new plant in Changchun, China. The new plant on 220,000 square meter of land in northern China will complement the supply structure of the Kumho Group, which already manufactures tires in Nanjin (southern China) and Tianjin (central China). The Company invested a total of 150 million US dollars in the new Changchun plant, which has the capacity to provide 3.15 million OE tires to China FAW. As the second phase of the Changchun project, it plans to spend additional 108 million US dollars to construct its second plant so as to increase its yearly production volume to 6.3 million tires. The Company will sign a memorandum of understanding on this project with the Changchun Economic and Technical Development Zone. (From a press release on Jul. 26, 2007)