Sailun investing €130m in Cambodia ‘tire industry cluster’

Qingdao City, China – Sailun Group is planning a $152 million (€130 million) Phase II expansion of its Kampot Economic Zone project in Cambodia, aiming to build a large-scale industrial cluster for chemical new materials and rubber-related manufacturing.

In a 4 Dec feasibility report, the Qingdao-headquartered group said the development will cover around 455 hectares under a long-term lease and focus on attracting producers of new rubber materials, composite rubber, silica, carbon black, rubber additives, scrap-rubber recycling, synthetic rubber and steel cord.

To be funded entirely by Sailun and executed by its subsidiary Kampot Bay Investment the project is expected to complete leasing procedures by end of 2026. Plot leasing to tenants are scheduled to run from 2027 to 2036.

According to the feasibility study, the expansion will strengthen Sailun’s overseas supply-chain layout and support the formation of a ‘comprehensive port-adjacent zone linked to the regional transport network.’

In its report, Sailun noted Cambodia’s “low labour cost”, improving infrastructure and preferential policies, including a nine-year corporate income tax holiday and tariff advantages.

Sailun launched the Phase I of the tire industry cluster project in November 2024, with a 12-month completion time.

The group has also been operating a manufacturing plant in Cambodia’s Svay Rieng province since 2021 and is currently expanding the facility to bring the plant's annual capacity to 21 million passenger car tires and 3.3 million TBR tires.

In its feasibility report, Sailun said the industrial base is designed to serve fast-growing demand in Southeast Asia, which it estimates at $12.7 billion for tires in 2024, with a market expansion rate of more than 8.5% annually from 2022 to 2032.

Sailun said the industry cluster is being built as part of a broader internationalisation strategy to “actively respond to market challenges brought by global economic and trade volatility.”

The globalisation plan, it said, includes existing units in Vietnam, Indonesia, Mexico and the first phase of its Cambodian complex, as well as new projects in Egypt and Shenyang, China, that are currently under construction.

Once these facilities come online, Sailun said it expects an overall annual capacity of 31.55 million all-steel truck & bus tires, 109 million semi-steel passenger car tires and 518,400 tonnes of OTR tires.