SEOUL :Shares of Kumho Tire, South Korea’s No.2 tire maker, slumped 8 per cent on Monday after a massive fire suspended operations at its factory in Gwangju on Saturday, threatening to disrupt supplies to global automakers.
Fire authorities had extinguished 90 per cent to 95 per cent of the fire, but the blaze destroyed a majority of the western part of the factory in the southwestern city, media reports said.
A Kumho Tire spokesperson told Reuters that it may have to revise down its target of raising its revenue by 10 per cent to 5 trillion Korean won ($3.58 billion) this year due to the fire.
The company, which has for years been trying to move its outdated factory in Gwangju, had not yet decided whether to rebuild the facilities, the spokesperson said.
The factory complex in Gwangju has a capacity to produce 12 million tires a year, accounting for nearly 20 per cent of Kumho’s global production capacity, she said.
The company’s customers include Hyundai Motor, Volkswagen Group and Mercedes-Benz.
Kumho Tire is seeking to increase production at other factories to make up for lost output, though the scope for expansion may be limited as the plants at home and abroad were running at full capacity, the company said.
($1 = 1,398.1100 won)
