China’s Haian Group to lead €500m Russia OTR tire project

Shenzhen, China – Chinese tire maker Haian Group has announced plans for a major all-steel engineering tire project in Russia, as part of a strategy to strengthen its position in the giant off-the-road (OTR) tire segment and deepen exposure to mining industry.

In a 26 Dec filing, Haian said it had signed an investment intention agreement covering a proposed giant OTR tire plant in Russia, with total investment capped at RMB 4.32 billion (€530 million).

In its first phase, the project will have a designed annual capacity of 10,500 giant all-steel engineering radial tires, with a construction period of three years.

The project will be implemented through Pioneer Co., the project company that will be capitalised and used as the investment vehicle.

The agreement was signed by Haian Group, its wholly owned subsidiary Haian Russia, and two Russian partners, according to the filing.

Total investment is budgeted at RUB53.9 billion (Yuan4.3 billion), of which RUB14 billion will be funded by the shareholders while RUB40 billion will be financed through loans.

Haian and its subsidiary will invest RUB6.63 billion in the project with a 51% controlling stake in Pioneer, said the filing.

Haian said giant OTR tires are core consumables for large mining dump trucks, with demand closely linked to global mining activity.

The group noted that demand in Russia increased after international tire brands exited the market in 2022, prompting large mining companies to turn to Chinese suppliers.

Haian said it secured new major mining customers, while existing Russian clients expanded their purchase volumes.

Haian Group completed its initial public offering (IPO) in November last year, raising Yuan2.23 billion, with net proceeds Yuan2.1 billion after deducting issuance expenses.

The Haian project ties in with a previous ERJ report published last July, which outlined plans by Russian polymer specialist JSC Avangard to build a ‘giant’ tire factory in the Omsk region.

The facility will be located in the ‘Avangard’ special economic zone, with production scheduled to start in the first quarter of 2028.

According to the ERJ report, the plant is set to produce around 10,500 extra-large tires per year, designed for “extreme loads,” and expected to be in high demand across major industrial sites in Siberia and the Russian Far East. (ERJ report)