[09 Jan] Thais Delay Rubber Shipments to Kumho Tire on Payments

Rubber trading and exporting companies in Thailand have delayed shipments to Kumho Tire Co. due to concerns over future payments, trading executives said Friday.

"Shipments for this month are still pending. We're still negotiating with them but can't disclose the details," said a Phuket-based trading executive, who didn't want his company to be named.

The executive said his company on average exports more than 1,000 metric tons of natural rubber to Kumho Tire per month.

Creditors of cash-strapped Kumho Asiana Group agreed Wednesday to freeze for three months debt repayments of Kumho Industrial Co. and Kumho Tire Co., a move intended to give the conglomerate time to carry out a restructuring program.

Earlier this week, Pongsak Kerdvongbundit, managing director of Von Bundit Ltd., one ofThailand's biggest producers of natural rubber, told Dow Jones Newswires his company will ship cargoes to Kumho only if banks can guarantee payments.

"Kumho has informed us through e-mail about the debt restructuring program, but we aren't making any shipments unless banks open lines of credit," said a top executive of another major supplier.

He said his company has a long-term contract to supply natural rubber to Kumho but monthly shipments aren't more than 200 tons and are made only to their tire making operations in South Korea.

The company has already received payments from Kumho for earlier sales, he said.

"Kumho is our long-term business partner, and we would like to continue the trading arrangement if they can guarantee the payments for rubber," he said, adding his company's long-term contract with Kumho is due to expire in March.

Tire manufacturing companies usually don't disclose how much natural rubber they consume, but speculation has been rife in Thailand's natural rubber trading circles that Kumho's monthly requirements could be more than 10,000 tons.

Kumho mainly purchases technically specified grades of natural rubber from Indonesia, Thailandand Malaysia such as SIR20, STR20 and SMR20, said an official with a Japan-based global trading company.

He said his company supplies a small volume of natural rubber to Kumho and there have been some problems related to payments.

"There have been problems (regarding payments), but it isn't immediate. It happened a few months ago," said the official.

(Source: irco.biz)