Kumho Tire said Wednesday it will invest 340 billion won ($297.6 million) on expanding its plant in Vietnam in order to increase its North America-bound exports, and respond to anticipated U.S. anti-dumping duties.
According to the tiremaker, its board agreed to invest 339.8 billion won into the Vietnamese plant from the third quarter of this year to the first quarter of 2023.
Kumho Tire said it will use idling land at the plant, which will be able to produce 9.3 million tires a year after the expansion, up 3.8 million from current capacity.
The company did not state how it would finance the investment, but sources said the company's owner, Doublestar of China, will be responsible for financing.
Other Korean tiremakers are also facing increased anti-dumping duties on their exports to the U.S. The Department of Commerce there is currently investigating anti-dumping allegations raised by the United Steelworkers, and reached a preliminary determination to impose a 27.81 percent duty on Kumho Tire products exported from Korea.
At the same time, the department set a 10.08 percent rate on tires produced in Vietnam, giving an advantage to companies having production facilities there.
"After considering our plan to increase North America-bound exports and potential U.S. anti-dumping duties, we came to the conclusion that increasing the capacity of the Vietnamese plant would be the best solution," a Kumho Tire official said.
