A major fire broke out at the Gwangju plant of Kumho Tire, a South Korean tire manufacturer, leading to a complete production shutdown and raising concerns about an inevitable short-term earnings decline.
Kumho Tire is a leading mobility company providing customers with safe and convenient transportation through advanced technologies and solutions. Since producing its first tire in 1960, the company has shown consistent growth.
As of 2022, Kumho Tire ranked 16th among global tire manufacturers and second in South Korea by revenue. It reported approximately $2.55 billion in sales in 2022 and exceeded $3 billion in revenue in 2024, rising to 13th place globally—demonstrating robust growth.
The fire occurred at approximately 7:11 a.m. on the 17th in Plant No. 2, located on the west side of Kumho Tire’s Gwangju facility in Sochon-dong, Gwangsan-gu. The blaze originated in the compounding workshop, where raw materials for tires are mixed. According to preliminary investigations, a spark of unknown origin from an industrial oven used to preheat raw rubber likely triggered the fire. Around 20 tons of raw rubber—highly flammable material—were stored in the facility, allowing the fire to spread quickly and destroy a large portion of the plant.
As the fire intensified, fire authorities escalated their response to levels 1 and 2 and eventually issued a National Fire Mobilization Order. A total of 462 personnel, along with 168 units of equipment—including 15 high-performance chemical fire trucks, 2 large-capacity foam spraying systems, and helicopters—were mobilized for full-scale firefighting efforts.
Two firefighters suffered burns during the firefighting operation. Thick smoke and dust from the fire spread to nearby residential areas, forcing the evacuation of 176 residents (96 households) from four apartment complexes to temporary shelters such as the Gwangju Women’s University gymnasium. Residents reported being unable to open their windows, with soot staining laundry and symptoms such as headaches and sore throats due to the smoke.
In response, Kumho Tire has completely halted production at the Gwangju plant until the site is fully cleared. According to Kim Chang-ho, an analyst at Korea Investment & Securities, more than 50% of the facility was destroyed, making prolonged production disruptions unavoidable. As a result, Kumho Tire is expected to suffer a temporary decline in earnings.
The company operates three domestic plants—in Gwangju, Gokseong, and Pyeongtaek—with a total annual production capacity of 27 million tires. The Gwangju plant, with a capacity of 16 million tires per year, accounts for approximately 60% of domestic production. This year’s production plan for the plant was 12 million tires. However, if operations cannot resume by year’s end, sales disruptions could affect about 7 million tires—roughly 10.8% of the previously estimated total volume.
When comparing to the 2023 fire at Hankook Tire’s Daejeon plant, which took 58 hours to extinguish and more than six months to resume operations, recovery at the Gwangju plant is also expected to take considerable time.
Analyst Kim Chang-ho outlined two potential strategies Kumho Tire may pursue following the fire. The first is to expedite the relocation to a new plant in Hampyeong. Even prior to the fire, Kumho Tire had been planning to sell the aging Gwangju facility and relocate to Hampyeong. However, changes in land use and the need to secure approximately $860 million in relocation costs were major obstacles.
Now that restarting the Gwangju plant seems unlikely, the relocation to Hampyeong may be accelerated. The second scenario involves rebuilding the Gwangju plant. If faster recovery is prioritized and rebuilding costs are relatively lower, reconstruction on the existing site may be a viable option. Kim noted that the volume loss from the fire, at 10.8%, is not overly large and can be partially offset by leveraging production from the Gokseong and Vietnam plants. Therefore, Kumho Tire’s long-term business outlook remains stable.
The suspension of operations at the Gwangju plant may also impact certain parts of the supply chain. Most domestic car manufacturers procure tires from multiple suppliers, so no immediate disruptions in vehicle production are expected. However, concerns have been raised about potential issues with export shipments to Japan, as some models produced by Gwangju Global Motors (GGM) use Kumho tires.
Fire and police authorities are planning a joint investigation with the National Forensic Service to determine the exact cause of the fire. The Ministry of Employment and Labor is also conducting an industrial safety inspection. Kumho Tire CEO Jeong Il-taek visited the site, expressed his apologies, and pledged full support for recovery efforts and resident assistance. The company and the Gwangsan District Office have set up dedicated counters for complaints and compensation as they work to manage the aftermath. How Kumho Tire navigates this crisis and moves forward with production recovery and business strategy will be closely watched.
