Kumho Tire shuts Gwangju plant after fire, derailing record sales run

Kumho Tire Co. has suspended all operations at its Gwangju plant in South Korea after a fire destroyed 50-60% of the production lines in one of its two main buildings, a disruption that could end its four-year record-setting sales streak.

The blaze broke out around 7 a.m. in the section where raw rubber is blended with chemical compounds in the second building of the Gwangju plant on Saturday, according to the National Fire Agency. It was extinguished by Sunday afternoon, leaving one person and two firefighters injured.

The Gwanju plant, located about 300 km south of Seoul, has an annual capacity of 12 million units, making up about one-fifth of Kumho Tire’s annual production of 65 million units across South Korea, the US, China and Vietnam.

The plant had rolled out high-margin, premium tires designed for sports cars under the brand of Ecsta Sport, as well as for electric vehicles. It also produced 18-inch tires fitted for high-end sports utility vehicles. They are about 20-40% more expensive than conventional tires.

Buoyed by rising sales of premium tires, Kumho has posted record-setting annual sales since 2020.

In the first quarter of this year alone, it raked in 1.21 trillion won ($864 million) in sales, marking its highest-ever quarterly revenue. For all of 2025, it targeted 5 trillion won in sales, which would be a new annual record for the second-largest tire maker in South Korea.

Kumho Tire is considering shifting some production at its fire-hit Gwangju plant to another facility in South Jeolla Province in Gokseong, which has slightly higher capacity than the fire-hit Gwangju plant.

With its domestic and overseas plants already running at full capacity, however, Kumho Tire may struggle to ramp up output to offset the production loss at its Gwangju facility, posing a challenge to its sales target for this year.

It is seeking to relocate its Gwangju plant to Hampyeong in the same province, but there has been little progress on the plan.

It is also considering building its first plant in Europe in Poland, Serbia or Portugal, but these plans are expected to take time to materialize.

“Coupled with the US 25% tariffs on imported cars imposed last month, the production halt at the Gwangju plant will hit Kumho Tire’s earnings this year,” said a tire industry official.

Kumho will decide whether or not to resume production at the Gwangju plant within the year.

It supplies products to six carmakers in South Korea, including Hyundai Motor Co. and Kia Corp. None have reported disruptions in tire supply following the fire.

If Kumho’s Gwangju plant remains shuttered, local peers Hankook Tire & Technology Co. and Nexen Tire Corp. will stand to benefit as carmakers are expected to search for alternative suppliers.

Meanwhile, Hankook has relocated some production lines from Daejeon to Geumsan in the same province following a fire at its Daejeon manufacturing complex in 2023. 

Kumho's Gwangju plant is covered by a property policy with DB Insurance Co., with a coverage limit of 500 billion won.

Write to Gil-Sung Yang at vertigo@hankyung.com

Yeonhee Kim edited this article.