Linglong outlines $270m Egypt tire plant

Zhaoyuan, China – Linglong Tire has detailed plans to invest $270 million (€237 million) in a passenger car tire production facility in Egypt as part of its overseas expansion plans.

In a feasibility study filed with the Shanghai Stock Exchange 24 Sept, Linglong said the plant would be built at Borg Al Arab in Alexandria province and have a capacity to produce 6 million radial passenger car tires per year.

The project will occupy over 250,000 sq.m. and have a two-year construction period, the SSE filing said.

The Chinese group said the plant would primarily target markets where it already operates or is developing business, with a particular focus on expanding its European market share.

It also identified the Middle East, North Africa, southern Europe and other African markets as potential destinations for Egypt-made tires.

Linglong said locating production in Egypt would help reduce logistics costs and address trade barriers affecting Chinese tire exports.

The filing highlighted Egypt's trade agreements with the EU, Turkey and African nations, adding that qualifying locally manufactured products could receive preferential or zero-tariff access to those markets.

At full operation, the project is forecast to generate annual sales of around $173.3 million and net profit of $34.6 million.

The Linglong filing follows a $2-billion memorandum of understanding signed between Linglong and the Egyptian government earlier this month for the construction of a major ‘tire complex’ in Egypt.

According to that agreement, the planned complex will manufacture passenger car, truck and bus tires, as well as conveyor belts, and will include several supporting industries and production inputs. (ERJ report)