Sailun unveils €90m expansion project at Cambodian tire factory

Qingdao, China – Sailun Group has unveiled a $93.5 million (€90 million) investment plan to expand production capacity at its tire manufacturing site in Svay Rieng province, Cambodia.

In a stock exchange filing 6 Jan, the Chinese group said it was investing the amount – including $61.2 million for construction and $32.3 in working capital – to expand production capacity for all-steel truck and bus radial tires at the site.

Set for completion in nine months, the project will add capacity for the production of 1.65 million units of TBR tires per annum once fully ramped up.

Overall, the investment will bring the plant's nameplate capacity to 21 million passenger car tires and 3.3 million TBR tires, Sailun added.

Sailun’s Cambodian facility is operated by wholly owned subsidiary Car Tire and its products are mainly used locally in Cambodia or exported to North America.

Sailun expects the new project to achieve an average annual revenue of $24.5 million and an average annual net profit of $4.7 million.

“According to the financial analysis, the project's net profit margin is 19.25%, and the investment payback period is 2.23 years,” said Sailun in its filing.

The additional capacity, said the tire group, will enable Sailun to “better meet” the demand in overseas markets and further enhance its ability to navigate international trade barriers.

“It will be of significant importance for improving the company’s competitiveness and expanding its market share,” it added.