ZC Rubber unveils €130m investment plan in new overseas tire factory

Hangzhou, China – Zhongce Rubber Group has approved plans to invest Yuan1.04 billion (€130 million) in a new tire production facility in Vietnam, as part of efforts to expand overseas capacity and mitigate trade risks.

The project, titled “Zhongce Vietnam tire production base (phase I),” will be developed in Ho Chi Minh City and is designed to produce 5 million semi-steel radial passenger car tires per year.

Construction is scheduled to begin in July, with a build period of 12 months, said ZC Rubber in a 2 April stock exchange filing.

The investment will be carried out via the company’s Hong Kong-based unit, which will establish a wholly owned subsidiary in Vietnam to build and operate the plant.

ZC Rubber also plans to inject up to $120 million (€104 million) into the Hong Kong entity to support the project.

According to the filing, the move is aimed at “further expanding production and sales scale,” improving overseas capacity layout and enhancing competitiveness in international markets.

ZC Rubber added that a multi-country manufacturing footprint will allow it to “flexibly adjust supply” and better navigate global trade frictions.

The Vietnam plant will target export markets including Asia-Pacific as well as other countries in Europe, North America and Asia, where the group said demand for Chinese-brand tires is “steadily growing.”

ZC Rubber said Vietnam offers advantages including stable economic growth, competitive labour and energy costs, and access to natural rubber, as well as tariff benefits under trade agreements.

The company expects the project to generate annual revenue of around Yuan848 million at full capacity, with an estimated return on investment of 17.5%.

The development forms part of Zhongce’s broader globalisation strategy, following the establishment of overseas production bases in Thailand and Indonesia.

The investment remains subject to approvals from Chinese and Vietnamese authorities.