ZC Rubber redirects IPO funds from Thailand expansion to China plant

Shanghai – Zhongce Rubber (ZC Rubber) has decided to reallocate unused IPO proceeds originally earmarked for its Thailand radial tire expansion to its local factory in Jintan, China.

In a filing to the Shanghai Stock Exchange on 18 Aug, the tire maker said it will use all uninvested proceeds from the Thai project to support its 'green 5G digital new energy vehicle radial tire' project in Jintan.

Established in 2012, the Jintan site in Jiangsu province was intended as a major passenger car tire base with exports to the US.

But after Washington imposed trade measures on Chinese tires in 2014, ZC Rubber suspended the project and instead moved ahead with overseas plants such as Thailand.

In its latest filing, ZC said the ‘resumption’ of the Jintan project was due mainly to a rapid expansion in China’s new-energy vehicle industry and overseas demand for Chinese tires.

The new expansion project at the Chinse site, ZC Rubber reported, is already under construction, with “equipment purchase, installation, and commissioning underway.”

Contracts, it said, have been signed for part of the work and it has been using its own funds, with the redirected IPO proceeds to be applied to subsequent payments.

Furthermore, the company stressed that the Thailand project “will continue according to the original construction plan,” with completion scheduled for June 2026.

Total investment and investment structure remain unchanged, with all further funding to come from ZC Rubber’s own resources.

According to ZC, capacity utilisation at the group’s main lines in China was running at 99.59% for full-steel passenger car tires and 99.61% for semi-steel truck tires in 2024.

The Jintan location, it said, offers strong links to the domestic NEV industry chain.

ZC Rubber said the plant will serve as a “leading benchmark factory for Industry 4.0 in intelligent tire manufacturing in China, and a green 5G digital beacon factory.”

The Thailand project, meanwhile, covers workshop and warehouse renovations, supporting facilities, advanced production equipment, and staff recruitment.

Once complete, it will add capacity to produce 7 million semi-steel radial tires a year.

As of 30 June, the Thailand project had a total planned investment of Yuan 1.184 billion (€141 million), of which Yuan275.9 million had been invested.

Of the Yuan850.0 million in IPO proceeds initially allocated to the project, Yuan178.5 million has been invested, leaving Yuan 671.5 million still unused.

The company said this Yuan671.5 million – equal to 17.07% of IPO net proceeds – will now be redirected to the Jintan project.