Sailun unveils plan to establish $250m Indonesia tire plant

Shanghai, China – Chinese tire maker Sailun Group is planning to invest $250 million (€230 million) in a new tire manufacturing plant in Indonesia as part of its overseas expansion policy.

The new facility will have annual capacity of 3 million passenger car radial tires, 600,000 truck and bus radial tires and 37 kilotonnes of off-highway tire products, Sailun said in a stock exchange announcement.

To be located in Demak City, Central Java province, the manufacturing facility is expected to be constructed within 21 months, according to the 12 March statement.

Explaining the investment, Sailun said Indonesia had “abundant labour and natural resources… providing unique advantages for the development of the manufacturing industry.”

Furthermore, it said, recent investments by automotive manufacturers in Indonesia offered significant growth opportunities in tire manufacture.

Sailun is the second Chinese tire maker to announce expansion into Indonesia over the recent months.

In February, China’s largest tire producer ZC Rubber unveiled plans to build a tire facility in the country. (ERJ report)

Sailun has been stepping up its overseas plans of late: most recently announcing a decision to expand into North America through a Mexican joint venture project. (ERJ report)

In addition to its three facilities in China, the manufacturer operates an overseas unit in Vietnam and has a project under way to build another greenfield plant in Cambodia. (ERJ report)