Sentury shifts Spanish project funds to Moroccan tire plant

Shenzhen, China – Qingdao Sentury Tire Co. is redirecting investment funds raised to establish a  passenger car tire plant in Spain to its under-construction tire factory in Tangier, Morocco.

In a 19 April stock exchange announcement, the Chinese tire maker said the project in Spain was “still in the local pre-approval process [and] no raised funds have been used.”

Instead, Sentury is to invest Yuan2.8 billion (€240 million) in phase II of Morocco project, which will add capacity to produce 6 million units of radial passenger car and light truck tires at the site.

Once completed, the Moroccan facility will have an overall capacity to produce 12 million units of passenger car and light truck tires per annum. (ERJ report)

In early 2022, Sentury disclosed plans to build a Yuan4 billion (€540 million at the time) plant in Galicia, northwest Spain, with capacity to produce 12-million car tires/year.

To build the  unit, the tire maker said intended to issue some 194.9 million shares in a “non-public manner” to no more than 35 specific investors to raise the funds. (ERJ report)

While the project in Spain has obtained environmental assessment (EA) permission, the building permit is still in the approval process, Sentury added.

“Due to the uncertainty in the timing of obtaining the building permit, the raised funds have been idle for a certain period of time,” the tire maker added.

The project in Morocco, on the other hand, “is progressing smoothly and the capital expenditure demand is large.”

Sentury went on to note that insufficient production capacity had become “an important factor restricting the company's further development.”

Therefore, the company said it “urgently needed to expand its existing production capacity and enhance its competitiveness.”

“In order to effectively improve the efficiency of the use of raised funds, the company plans to change the original investment project of raised funds,” Sentury further explained.