Kumho Tire announced on the 19th that production was fully halted due to a fire that occurred at its Gwangju plant on the 17th. The annual revenue of the Gwangju plant is about 891.7 billion won, which corresponds to approximately 20% of the total revenue. As a result, the plan to achieve a 10% growth in revenue this year is expected to face setbacks.

Kumho Tire disclosed that it would halt tire production due to a fire that broke out in the refining process at the Gwangju plant. The Gwangju plant, which has produced approximately 12 million tires annually, accounts for about 44% (27 million tires) of the nation’s total production capacity. The annual revenue of the Gwangju plant is 891.697 billion won, which represents 19.7% of Kumho Tire's total annual revenue of over 4.53 trillion won last year.

On the morning of the 19th, the third day of the fire at Kumho Tire's Gwangju plant, authorities are using heavy machinery to clear the debris at the Kumho Tire Gwangju plant site in Sochon-dong, Gwangsan-gu, Gwangju. Afterwards, authorities deploy an unmanned water suppression vehicle to extinguish the phantom flames. /Courtesy of News1

The resumption date for production has not yet been confirmed. Kumho Tire stated, "We are currently verifying the circumstances and extent of the damage from the incident," adding that "executives and employees are working to minimize losses through prompt accident management and recovery efforts."

Kumho Tire also disclosed that it is covered by comprehensive property insurance. The insured amount for the plant is 1.2947 trillion won, with DB Insurance and Hyundai Marine & Fire Insurance among the insurers. Kumho Tire noted that "the amount of insurance compensation will be determined based on the loss assessment results from the insurance companies" and that "the direct and indirect losses from this fire are currently being verified."

Observations suggest that Kumho Tire's performance will also be impacted by this fire. The company had set a goal to achieve revenues of 5 trillion won and operating profits of 676.7 billion won, reflecting growth of 10% and 15%, respectively, compared to last year. However, with about half of the Gwangju plant, which accounts for about 20% of Kumho Tire's total sales, being damaged by the fire, production disruptions and operational reductions have become unavoidable.

Earlier, at 7:11 a.m. on the 17th, a fire broke out in the refining process at the Kumho Tire Gwangju plant located in Gwangsan, Gwangju. Fire authorities have been continuing firefighting efforts using heavy equipment since 7 a.m. on the third day. The current firefighting rate is reported to be approximately 90-95%. Authorities succeeded in initially extinguishing the main fire at around 2:50 p.m. the previous day, 31 hours and 40 minutes after the fire broke out, but were unable to fully extinguish all remnants.

It has been preliminarily assessed that 50-60% of the second section of the Kumho Tire Gwangju plant has been lost due to this fire. The fire reportedly started from unidentified sparks in the refining process of the second section. Authorities plan to investigate the exact cause of the fire once firefighting is completed.