Business

Macon's Kumho Tire plant expects to begin producing tires for retailers

Kumho Tire plant in Macon set to begin production soon

Human Resource Director Jim Frentheway talks in February 2016 about plans for the Kumho Tire plant in Macon.
Up Next
Human Resource Director Jim Frentheway talks in February 2016 about plans for the Kumho Tire plant in Macon.

Fourteen months ago, the site for Kumho Tire Georgia off Ga. 247 in south Bibb County was not much more than a field of grass.

Jim Frentheway, the human resource director for the manufacturing plant, had just been hired.

"When I first heard that we would have a plant and would making some tires in January a year later, I thought that was pretty ambitious," he said. "I was surprised that anybody thought that could be done, but it certainly has happened.

"We now have seven buildings out here, and a little over 1 million square feet. We have a functional tire manufacturing plant."

The company has hired about 340 people so far, and many of them are still being trained.

"What we will have to start is about 365, but that's just starting," he said. "We will need more as time goes on, but I don't know what that will be right now."

Early on, the company announced it initially would hire about 475 people, but that was "slightly exaggerated" he said.

The company began making test tires about two months ago. Kumho is hoping this week to get the certificate of occupancy it needs to make tires to sell, he said.

The Seoul, South Korea-based company's first manufacturing plant outside Asia is expected to produce 4 million passenger and light truck tires a year. The plant in the Sofkee Industrial Park is 98 percent complete, and while all the equipment is there, some machines are still being assembled, Frentheway said.

When the plant began construction in fall 2014, Stephen Adams, the economic development director for the Macon-Bibb County Industrial Authority, was established as the company's point of contact and project manager. The authority worked to bring the company here and helped arrange financing with bonds.

"They had a team of experts in place that came over from Korea," Adams said. "It was a very smooth process."

Initially, Adams helped Korean workers find housing, barbers and mechanics. He also helped get them integrated into the community, "like something you would do for a new neighbor coming into town," he said.

As the project moved along, he helped coordinate utilities and local contractors.

"They had a monumental task ahead of them to get this plant up and running as soon as possible, and they've done a really great job of that," he said. "It's been a pleasure working with them."

The relationship is expected to continue.

"If the economy holds ... in two to four years we hope to move to Phase II," Frentheway said. "We'll do another 800,000 square feet and double the size of the workforce. ... It depends on the economy and sales, but we expect that to happen."

MACHINES CAN MAKE A TIRE EVERY 36 SECONDS

Although cameras are not allowed inside the facility because the equipment is proprietary, Frentheway gave a Telegraph reporter a tour of the facility last week.

The total square footage of the seven buildings, which are separated to allow for easier vehicle movement on the property, is equal to nearly 23 acres.

The main entrance building is glass, and massive glass doors open into a two-story atrium with a center staircase to the second floor. Most of the workers will sit in an open, shared space with adjoining desks. It is still a construction zone, so office workers are now crammed into temporary trailers sitting beside the facility.

The heavily automated process begins with machines that mix chemicals, rubber and fabric. Slabs of rough rubber are smoothed. Once an unfinished tire is created from the slabs, it moves into a large machine that cuts a programmed tread into the rubber. This part of the operation is surprisingly quiet.

A tire will be made every 36 seconds, Frentheway said.

"So, it's very modern, very automated. We have state-of-the-art equipment here," he said.

After tires travel through the facility along a route of conveyor systems, lifts, machines and manned and unmanned fork lifts, tires are inspected and stored. About 100,000 tires can be stored in a huge, multi-level tower.

As soon as Kumho gets the green light it needs to sell tires, they will be sold on the retail market and could be carried by Middle Georgia tire dealers. But after about eight to 10 months, the company expects to receive the proper certification to sell its tires directly to car manufacturers. Then it will no longer sell to retailers.

"Right now they are set to go to Kia, Hyundai and Chrysler," Frentheway said.

The way to tell if a Kumho tire is made at the Macon plant is easy. Each tire will be stamped "Made in the U.S.A." Also all tires from this plant will have "000" on them.

When the Kumho Tire facility is at full production, it will have four shifts of workers, 24 hours a day, seven days a week, Frentheway said.

INVESTMENT UP TO $600 MILLION

Even though the recent construction was put on the fast track, plans for this plant started eight years ago.

In February 2008, Kumho announced it would build a 1.3 million-square-foot tire-making facility on 130 acres in the industrial park. At that time, the company planned to make a $225 million investment. Bonds to finance the deal were for up to $375 million. At that time, production was set to start in October 2009. The company said it planned to make 2.1 million tires a year.

The incentive package included a 20-year tax abatement and job tax credits. The package also included a $3.9 million OneGeorgia grant, of which $2 million was used for land grading at the industrial park.

At that time the local property tax abatement approved by the county and school board would be $17 million over 20 years.

Then the economy tanked, and everything was put on hold for five years.

When the economy perked up, the company made good on its pledge to build the facility here, said Kevin Brown, the Industrial Authority's attorney.

"But the project got bigger," he said.

In July 2014, the company announced it would increase its investment to about $413 million in the project. The authority adjusted the amount of the bond financing up to $600 million to give the company "some wiggle room," he said.

The company made a larger investment mostly because "time had passed, things cost more, and there had been advancements in technology," Brown said. The company then said it would produce 4 million tires a year.

"Basically the $413 million is their base number, and the $600 million is the top number. And their investment is going to be somewhere in between," he said. "We still don't know what it is yet because they are still spending. They are not done yet."

Because the amount of the investment went up, the tax abatement will go up to about $30 million, he said.

"So they are still paying more than 30 percent (of total taxes due)," he said. And over the next 20 years, the amount the company pays will increase every year until it pays the full tax due.

Adams said the project has been "a neat thing to watch." It's been a team effort from the beginning, including state and local governments, the Georgia Department of Labor, Central Georgia Technical College and others.

"This is a project that is obviously very big for Macon-Bibb County, and everyone rose to the challenge to move the process along," he said. "It's a partnership that has proven to be very beneficial for both sides."

To contact writer Linda S. Morris, call 744-4223, or follow her on Twitter@MidGaBiz.

  Comments