New Double Coin plant to boost firm's truck tyre capacity

By Namrita Chow

Shanghai, China -- Double Coin Holdings Ltd.'s newest tire plant -- a $165 million radial truck tyre factory under construction in Chongqing -- will boost the firm's annual capacity for truck tyres by 45 percent to 7 million units when it comes on stream in the fourth quarter.

Double Coin Holdings -- formerly Shanghai Tire & Rubber Co. Ltd. -- selected Shuangqiao, Chongqing, for the new plant because it's designed to serve customers in southwest China, according to Sun Wen, a spokesperson for the company. Double Coin's existing plants are all in the eastern region.

Chongqing is a hub for automotive factories and home to automotive conglomerate ChangAn Automobile Co. Ltd., which has joint ventures with Mazda Motor Corp., Suzuki Motor Co. Ltd. and Ford Motor Co., and builds its Ford Mondeo and Fiesta and Mazda3 cars.

Asked if the company has plans to produce passenger tyres at the new plant, Mr. Sun replied: “It depends on the market.” He declined to state if there are definite plans to enter the passenger car tyre segment.

Double Coin owns 30 percent of a venture with Group Michelin-Shanghai Michelin Warrior Tire Co. Ltd.-that produces passenger car tyres at a plant in Shanghai.

The new plant's first phase represents new radial truck tyre capacity of 2.5 million tyres, Double Coin said. The company has secured 165 acres (67 ha) in Shuangqiao for the first phase and has another 82 acres under contract for a potential second phase.

The new plant is the second in a series of expansions, following the opening two years ago of a plant in Rugao, Jiangsu. Capacity at the Rugao plant is 1.5 million radial truck tyres, including some off-the-road (OTR) tyres.

“Capacity at the Rugao plant is increasing every year,” Sun said.

Double Coin's original plant in Shanghai made 2.8 million truck tyres in 2007. That plant also makes OTR tyres.

Exports account for about 30 percent of total production with the remaining 70 percent sold in China's growing domestic market.

North America is Double Coin's largest export market, followed by Europe. About 90 percent of exports are for the aftermarket, according to Dean Jin, the company's logistics manager.

Double Coin sources most of its natural rubber from Thailand, Indonesia and Malaysia with some also sourced domestically from Hainan Island. Steel cord also is imported. Other materials such as carbon black and nylon cord are sourced locally.

Double Coin is developing a new tyre described by Mr. Sun as “a giant tyre. (It's a) very big tyre for industrial and mining machines.”

From Tire Business (A Crain publication)