Sentury unveils Turkish tire project to ‘circumvent’ trade barriers

Qingdao, China – Sentury Tire has unveiled plans to invest $273 million (€240 million) in a new tire plant in Turkey in a joint project with local tire distributor Tatko.

The proposed facility will have the capacity to produce 7 million high-performance passenger car and light truck radial tires per year and employ around 400 people, Sentury announced 8 Oct.

According to its feasibility study, Sentury will hold a 90.1% stake in the project, with Tatko taking the remaining 9.9%.

The partners plan to build the facility over 18 months, said the study without specifying when construction or production would begin. It also did not identify the plant's exact location within Turkey.

The project forms part of Sentury's “833Plus” global expansion strategy, adding Turkey to its overseas manufacturing footprint alongside existing plants in Thailand and Morocco.

Tatko is expected to contribute its nationwide Turkish sales and distribution network, warehousing and logistics capabilities, local market knowledge and export channels into the Balkans and Central Asia.

The partnership is intended to support both OE and replacement-tire sales, according to Sentury.

The feasibility study highlighted Turkey's automotive manufacturing base, noting that Ford, Toyota, Hyundai and Renault all operate production facilities in the country, providing opportunities for local OE tire supply.

Turkey's position as a potential gateway to Europe is another key part of the project rationale.

The feasibility study highlighted the country's customs union with the EU, noting that qualifying industrial products can enter the EU without customs-union tariffs using the "A.TR movement certificate system".

Sentury said this could “effectively circumvent EU trade barriers, reduce export costs to Europe and improve the competitiveness of its products in the European market.”

Sentury expects the plant to generate annual sales of $204.62 million at full production, with annual net profit forecast at $42.11 million.

The company said the factory would draw on its established “intelligent manufacturing” systems and experience operating plants in Thailand and Morocco.

The planned systems include central production control, automated production execution, smart warehousing and logistics, automated inspection and scanning, and production scheduling and early-warning systems.