The relocation of the Kumho Tire Gwangju plant, a long-standing goal for the Gwangju regional economy, is once again attracting attention. Located near Gwangju Songjeong Station, the Kumho Tire Gwangju plant has been in operation since 1974. However, with the city's expansion, it has become increasingly close to residential areas, leading to concerns about environmental issues and hindering urban development. Since 2019, the company has been pursuing relocation to the Hampyeong Bitgreen Industrial Complex alongside the modernization of its production facilities. However, the massive relocation costs and land use change issues have caused disagreements between the Gwangju city government and Kumho Tire, resulting in a prolonged stalemate. Recently, however, several positive changes have emerged, raising expectations that the relocation project may finally gain momentum. This article will examine the background, current status, and future challenges of the Kumho Tire Gwangju plant relocation.
The Kumho Tire Gwangju plant's location in the city center, near Gwangju Songjeong Station, has been a major constraint on urban development. Concerns have been raised about environmental problems such as noise and dust pollution from the plant, as well as the inefficiency of urban planning due to the large factory site. The Gwangju Songjeong Station area is designated as a KTX investment-led development zone, with ongoing efforts to strengthen its regional transportation hub function and promote integrated urban development. The relocation of the Kumho Tire plant is considered essential for transforming this area into a new economic hub combining commercial, cultural, and business facilities. Furthermore, Kumho Tire's internal need to modernize its aging production facilities to enhance its competitiveness in the global tire market is another crucial factor driving the relocation.
Discussions regarding the relocation of the Kumho Tire Gwangju plant began in earnest in 2019. Kumho Tire planned to relocate to a site of approximately 500,000㎡ in the Hampyeong Bitgreen Industrial Complex, paying a deposit to LH Corporation in January 2022 for the relocation site. Relocation costs were estimated at approximately 1.2 to 1.4 trillion won. Kumho Tire planned to cover these costs by selling the current Gwangju plant site after changing its land use designation to residential and commercial. However, the relocation process faced difficulties due to restrictions under the Enforcement Decree of the National Land Planning and Utilization Act, which limits land use changes to idle land or sites for relocating large-scale facilities. The Gwangju city government also expressed cautious concerns about potential special treatment related to changing the land use while the plant was operational and the possibility of Chinese capital making a quick profit and leaving. In 2023, the consortium selected as the preferred bidder for the plant site development withdrew from the project due to low profitability.
Recently, there have been signs of positive change in the long-stalled discussions about the relocation of the Kumho Tire Gwangju plant. In January, a revised National Land Planning Act easing regulations on land use changes for industrial areas was passed by the National Assembly, opening up the possibility of changing the land use designation of the Kumho Tire site. Based on this, the Gwangju city government designated the plant site, an industrial area, as an urban innovation zone, allowing flexible application of floor area ratio and building coverage ratio before the plant's closure, enhancing the profitability for the purchaser of the site. Gwangju city also expressed a more proactive stance, stating that if Kumho Tire met legal requirements, such as commencing construction of a new plant, and the developer presented a concrete development plan, they could begin pre-negotiations regarding land-use change even while the plant remained operational. Kumho Tire also reaffirmed its commitment to relocation by signing a contract in October 2024 with LH for the purchase of a 500,000㎡ site in the Bitgreen Industrial Complex. The planned acquisition date is October 30, 2029, requiring the completion of the Gwangju plant sale and relocation preparations beforehand.
The relocation of the Kumho Tire Gwangju plant and the subsequent development of the existing site are expected to have significant positive effects on the regional economy. According to a research commissioned by Gwangsan-gu, if the plant remains in its current location, the estimated annual economic ripple effects would be 58.1 billion won in production value, 28.1 billion won in added value, and 621 direct and indirect jobs. However, if the plant is relocated and the current site and surrounding areas are developed into cultural spaces, integrated commercial spaces, parks, and business districts, the estimated production value would increase to approximately 500 billion won, added value to approximately 2000 billion won (about 10 times higher than the current value), and the number of direct and indirect jobs to approximately 3000 (about 5 times higher). This indicates that the Kumho Tire relocation could be a crucial step in transforming the Gwangju Songjeong Station area into an innovative complex cultural space and a leading force in regional economic revitalization.
Although the relocation of the Kumho Tire Gwangju plant is gaining traction, challenges remain. The most significant issue is securing the relocation costs, estimated to exceed 1 trillion won. Kumho Tire intends to finance the relocation through the sale of its current site, but finding a developer might be challenging given the sluggish construction market. Furthermore, coordinating with stakeholders involved in the land use change process and addressing concerns of the local community are crucial tasks.
The fact that Kumho Tire has reported record-high profits for two consecutive years is a positive sign. The Gwangju city government and Gwangsan-gu are actively pursuing the relocation, and public support is high. It is hoped that these efforts will bear fruit, leading to the successful completion of the Kumho Tire Gwangju plant relocation and bringing new vitality to the Gwangju Songjeong Station area.
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