Business

Vietnam plant is a strategic export hub for Kumho Tire

Kumho Tire’s manufacturing facility in Vietnam has emerged as a strategic export hub for the Korean tire giant, driving growth in key international markets while showcasing remarkable progress in financial health.

Kumho Tire’s manufacturing facility in Vietnam (Photo: Vneconomy)
Kumho Tire’s manufacturing facility in Vietnam (Photo: Vneconomy)

Seoul (VNA) – Kumho Tire’s manufacturing facility in Vietnam has emerged as a strategic export hub for the Korean tire giant, driving growth in key international markets while showcasing remarkable progress in financial health.

According to the Republic of Korea’s Financial Services Commission (FSC), the giant’s 81.5 billion KRW (58.8 million USD) debt guarantee provided for its Vietnamese subsidiary for a Woori Bank loan, which was originally set to mature in early July 2027, was lifted on July 10 as the firm repaid the entire loan ahead of schedule.

Kumho Tire Vietnam has been actively reducing its debt load since early 2024. The subsidiary’s total debt surged from 119.5 billion KRW at the end of 2021 to 285.1 billion KRW in 2022, peaking at 367.1 billion KRW by the end of 2023. However, that figure declined 3.1% to 355.8 billion KRW by the end of 2024, and further dropped 4.5% to 339.9 billion KRW by the end of Q1 this year.

The improvement is even more striking when compared to the company's capital scale. The debt ratio, a key indicator of financial stability, dropped significantly, from a high of 103.1% at the end of 2023 to 77.1% in Quarter 4 of 2024 and 71.2% in the first quarter of this year.

A leader at the Kumho Tire facility said the enterprise is striving to ensure healthy finances by focusing on timely debt repayment.

The previous surge in debt for Kumho Tire Vietnam was a result of the expansion of the Binh Duong plant. With the completion of the expansion project, debt levels have declined significantly. The expansion increased the facility’s production capacity, with output rising from 5.9 million to 12 million tires annually.

The Vietnamese plant plays a pioneering role in Kumho Tire’s export to North America and Europe. North America represents Kumho Tire's largest market, with 90% of its sales in the region sourced from the Vietnam factory. In 2024, Kumho Tire posted 1.3854 trillion KRW in revenue in North America, up 9.9% year-on-year. Meanwhile, the figure for Quarter 1 of this year was 416.9 billion KRW, surging 31% year on year./.

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