Korean tyre producer Kumho Tire has signed a technology transfer agreement with Pakistan based automobile battery manufacturer Century Engineering Industries.

Century plans to build a tyre plant with a million tyre capacity annually, which would likely to be hiked to five million over a period of time.

Headquartered in Gwangju, South Korea, Kumho would support Century for a decade up to 2028 in acquiring technological expertise in tyre manufacturing. In turn, Century would pay lump-sum fee of $5 million besides royalty amounting to 2.5% of future sales.

“We will leverage this deal as a starting point to establish technology transfer as a new revenue source and develop a variety of business models that build on our expertise in tyre manufacturing in order to further enhance our performance,” said Kim Jong-ho, CEO of Kumho Tire

As per the tech transfer agreement, Kumho would extend technology to produce 28 types of tyres for passenger and commercial vehicles and renew the contract every five years after the initial term ends. The agreement also covers standardisation, quality control and evaluation in the manufacturing process.