Fire Halts Production at Kumho Tire's Key Factory
A devastating fire at Kumho Tire's Gwangju factory has halted operations, threatening global supply chains. While efforts are underway to compensate for lost production, capacity constraints challenge expansion. The incident could force Kumho to lower its revenue projection for this year by 10%.
- Country:
- South Korea
Kumho Tire, South Korea's second-largest tire manufacturer, experienced an 8% drop in stock value on Monday following a significant fire that interrupted operations at its Gwangju factory. The incident poses a threat to the supply line of major global automakers.
According to reports, fire authorities managed to extinguish the bulk of the flames, yet the conflagration ravaged the majority of the plant's western section. A company representative told Reuters that this catastrophe might compel Kumho Tire to downgrade its annual revenue growth forecast from 10% to 5 trillion Korean won ($3.58 billion).
The Gwangju facility boasts an annual output capacity of 12 million tires, which translates to about 20% of Kumho's global production. Although the firm is attempting to ramp up production at other units to offset the decreased output, the possibility seems constrained as its facilities are already operating at full tilt.
(With inputs from agencies.)
- READ MORE ON:
- Kumho Tire
- fire
- Gwangju
- automakers
- Hyundai
- Volkswagen
- Mercedes-Benz
- revenue
- production
- capacity
Google News