Guiyang, China – Guizhou Tyre is to build a truck and bus tire plant with 1.2 million unit annual capacity in Vietnam, according to its filing in April.
Located at the Long Hau Industrial Park near Ho Chi Minh City, the new plant has 200,000 square-metre total area with a 12-month planned construction period.
A €222-million (1.7 billion yuan) investment is earmarked for the project, which when in operation is expected to generate €19 million annual profit on €137 million sales.
“We are still in the beginning stage of getting regulatory approval and it may take a few years before the plant is completed,” Guizhou Tyre’s board secretary Li Shangwu told ERJ.
A new plant in the major rubber producing country will lower the company’s logistics costs and shorten the delivery cycle, said the filing, and also help avoid the impact of trade tariffs.
Last year Guizhou Tyre turned profit with €2 million net earnings and saw its annual revenue rise by 18% to €742 million. Overseas markets accounted for 55% of its 2016 revenue.