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Zhongce Rubber, one of China’s largest and most diverse tire manufacturers, is set to invest 1 billion CNY (approximately $145 million USD) in the initial phase of a new factory located in Vietnam. The facility aims to better serve increasing international demand, navigate trade barriers, and expand its global presence.
The plant, scheduled to be built in Ho Chi Minh City, will produce roughly five million semi-steel radial tires annually, primarily for passenger vehicles, according to company officials. Construction is expected to commence in early July and will take around a year to complete.
When operational, the factory is projected to generate an additional 849 million CNY ($123 million USD) in yearly revenue, with an estimated return on investment of 17.5 percent.
Targeted primarily at markets within the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—the free trade zone in the Asia-Pacific region—as well as Europe and Southeast Asia, the new factory aims to tap into the rising demand for Chinese-brand tires in these areas. Given the company’s established sales channels there, prospects for the new facility are promising.
With clients including automakers like BYD, Toyota, and Stellantis, the company’s long-term vision is to become a leading global tire producer, planning to continually establish new overseas plants. It currently has manufacturing facilities in Thailand and Indonesia and is constructing another in Mexico.
In the first half of last year, overseas markets contributed about 4.5% of total revenue, amounting to 9.9 billion CNY ($1.4 billion USD), as reported in the company’s mid-year financial update.
The company’s stock (SHA:603049) closed today at 49.19 CNY ($7.14 USD), down 0.7 percent, after earlier dropping 1.8 percent to 48.62 CNY.
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