Business

Kumho delays plant construction

Construction of the $225 million Kumho Tire plant in south Bibb County, which had already been delayed once, has been pushed back three years.

When plans for the 1.3 million-square-foot facility were first announced in January 2008, construction had been expected to begin in May of that year with production beginning this month.

But last October, when the global economy sank, Kumho delayed the project and pushed back construction until this fall or winter.

The economy created a shift in its timeline, but the company still plans to build here, Chip Cherry, president of the Macon Economic Development Commission, said Tuesday.

“(Kumho officials said) they were going to honor their commitment and that they would begin production at this facility no later than fourth quarter of 2013,” Cherry said. “So what that means is that there is a 16 to 18 months process to build the building ... so they are anticipating beginning sometime in 2012 ... so they can be up and running at the end of 2013.”

The manufacturing plant planned in Sofkee Industrial Park still is expected to employ about 450 people, he said.

Macon Mayor Robert Reichert met with a Kumho delegation about a month ago when they addressed the delay.

“It’s disappointing but understandable in this economy,” Reichert said. “(The plant here) was going to supply new tires for new vehicles and obviously the number of new vehicles has been reduced dramatically. So they are trying to wait this thing out. ... I am confident they are coming.”

The Seoul, South Korea-based company went through an “in-depth analysis of all its global manufacturing capabilities and projected demand of its products” before it came to the decision that a North American manufacturing plant was still what the company needed and that it needed to put the facility here, Cherry said.

The company originally planned to make light truck tires at the plant, but last year after gas prices shot up “light truck sales went in the tank,” he said.

The nation shifted to passenger cars, which shifted the demand for tires, temporarily at least.

“So (Kumho) is evaluating the market trends” to determine the type of tires it will make here, he said.

Despite the long delay, Cherry said he’s certain Kumho will build a plant in Bibb County.

“If there was ever a time to bow out gracefully, it would have been right now,” he said. “But they came back and essentially gave us their word that they were committed to this facility and they were going to build this plant, and I believe them.”

The company had created about 9,000 square feet of temporary office space in trailers at the industrial park.

Since the construction date has been moved back, those trailers are being removed from the site, Cherry said.

The company is renting an office on Bowman Road for two or three people “to maintain a presence in the community,” Cherry said.

At one time, Kumho had about 50 people here, and some of them have been reassigned to the office in Korea, relocated to the company’s California office or terminated, he said.

Since the company first contacted Cherry about delaying the construction, he and others have been working with state, federal and local officials to reaffirm all the agreements for several million dollars in incentive funds already lined up, he said.

“Obviously there are some issues with regard to the timing of bond payments and other things, but some of those issues are mitigated because of what was built-in to allow for contingencies,” Cherry said.

The last part of that notification process was completed Tuesday when Cherry met with Bibb County commissioners.

“There had been concern about people wondering about the status in terms of whether it would continue,” Chairman Sam Hart said after the meeting. “We were relieved ... that they have reconfirmed that they are coming to Macon and bringing the jobs. ... We are excited that they intend to come here.”

The plant here would be Kumho’s first manufacturing plant outside Asia. The company, founded in 1960, is considered one of the world’s largest tire makers.

Its U.S. headquarters in Rancho Cucamonga, Calif., opened in 1975.

The company’s U.S. sales jumped from about $150 million in 2002 to about $565 million in 2007, the company has reported.

Kumho had $2.4 billion in sales worldwide in 2007.

To contact writer Linda S. Morris, call 744-4223.

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