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Kia to build factory in Georgia

South Korea's Kia Motors Corp said yesterday it would set up a US$1.2 billion plant in the US state of Georgia, as its parent Hyundai Motor Group seeks to globalize its production base.

Kia Motors, the second-largest automaker in South Korea next to its sister company Hyundai Motor, said it would put its first plant in the US in West Point, Troup County, Georgia State.

The southern state had been competing with Mississippi and Kentucky for the new plant which will be completed by 2009 with an annual capacity of 300,000 units.

A memorandum of understanding was signed between Kia and Georgia State, with Kia Motor president Chung Eui-sun and Georgia Governor Sonny Perdue taking part.

2,500 local workers

It will employ approximately 2,500 local workers, while five or six suppliers are expected to set up operations in Troup County and the surrounding areas, thereby resulting in the creation of an additional 2,000 jobs.

Kia, an affiliate of South Korea's largest carmaker Hyundai Motor Co, chose West Point over rival sites because of its proximity to a Hyundai plant in Alabama, some 135km away.

The Hyundai Motor plant in Alabama, which opened last year, has an annual production capacity of 100,000 units. This will be increased to 300,000 units by 2009.

"Kia Motors has entered an aggressive growth phase in the United States and its decision to build the plant in West Point is the latest example of the company's commitment to the US market," Chung said.

"Kia has made tremendous investments in design and engineering to better meet the needs and desires of US consumers. This new plant will produce high quality, well-styled vehicles with the safety features and affordability that customers expect from Kia," he said.

Perdue said Georgia State was excited about the investment that will create thousands of new jobs.

"We are very excited about this day. We understand it's a big day for Georgia and it's a big day for Kia Motors ... This will be our first Korean plant for Georgia," he said.

He said Georgia will live up to the expectations Kia has placed on the state.

Mutually beneficial

"You will find a very engaging workforce [in Georgia], and we're looking forward to producing products for the Kia brand. We look forward to the relationship that we believe will be long-standing -- and mutually beneficial and profitable -- for Kia Motors and the State of Georgia," he added.

Georgia promised various incentives which are worth US$410 million. These include free land and infrastructure, subsidies for the creation of new jobs, financial support for training workers and tax breaks.

Kia expects its North American sales to climb 15 percent to 350,000 units this year and further grow to 800,000 by 2010.

Its total sales for last year stood at 1.22 million units, including 266,000 in South Korea.

It has more than 32,500 employees at 12 manufacturing and assembly operations in seven countries, with its network of distributors and dealers covering 160 countries.

Kia is building plants in China and Slovakia as well, with an annual production capacity of 300,000 units each.

The new plant in Georgia State is part of Hyundai Motor Group's efforts to triple its overseas production to 3 million units per year, more than 40 percent of its total production.

Hyundai Motor Group is expected to produce 1 million units this year in its overseas plants, accounting for 25 percent of its total production.

"We are building up plants overseas as that's the surest way to cope with the strong won, raw material price hikes and various trade and non-trade barriers," a Hyundai Motor official said.

Currently, Hyundai Motor Group has plants in China, India, Turkey and in the US state of Alabama.
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