Aeolus unveils €40m share issue plan to fund giant-tire project

Henan, China – Aeolus Tyres is to issue shares to specific investors with the aim of raising Yuan300 million (€39 million) for an ongoing project to manufacture giant-tire at its site in Jiaozuo City, Henan.

In a 22 Oct stock exchange filing, Aeolus said the funding would go towards 'a high-performance, giant engineering radial tire capacity expansion and efficiency improvement project.'

As previously disclosed, the project is estimated to cost Yuan1.47 billion (€185 million) and will add production capacity for 20,000 units/year of giant OTR tires at the facility, which is being upgraded.

According to an environmental impact report in April, the Aeolus site currently has capacity to produce 130,000 units of all-steel OTR tires and 1.2 million all-steel radial truck tires per annum.

However, Aeolus is now completing an earlier project to convert the lines to expand production of 'giant' engineering tires to just under 111,000 units/year, while eliminating capacity for the manufacture of 1 million TBR tires.

With a two-year completion window, the projects will eventually enable the manufacture of 260,930 all-steel OTR tires and 200,000 all-steel load-carrying truck and bus tires.

Aeolus said it will employ technology developed in collaboration with Beijing Chemical Industry University and Beijing Rubber Industry Research & Design Institute to produce 49" to 63” tires.

The proprietary technology, it said, will enable the group to meet growing global demand and “compete with the three major international brands in the field of giant engineering radial tires.”

Aeolus expects to fully ramp up production at the site within four years, with annual commissioning rates slated to reach 30%, 60%, 80% and 100% over this timescale.

At full capacity, the Chinese-based tire manufacturer expects to achieve annual sales of Yuan1.56 billion from the project.