Chinese tyre producers are increasingly expanding beyond borders in the Far East as the cost of production is rising in the mainland. Tyre companies are scouting for new sites in the neighbouring countries that provide cost advantage to their high-volume operations. Guizhou Tyre based in the Southwestern part of China is investing in a new tyre site in neighbouring Vietnam.
“We are putting-up a new plant in Vietnam as cost of production is competitive compared to China, besides, the South-East Asian country has close proximity as it shares border with us, which also provides an advantage to manage the tyre factory much better,” said Jack You, General Manager, Guizhou Tyre Import & Export Co Ltd.
Guizhou Tyre is investing $500 million in building the tyre facility in Vietnam. The phase-1 of the site involves setting-up of 1.2 million TBRs capacity annually and it would likely to be operational by end 2019.
The investment splits with $270 million would be invested in the phase-1 and remaining $230 million in the phase-2. The second phase would commence in the next 2-3 years and also involves building 500,000 capacity of agricultural, OTR, industrial & solid tyre in order to widen the product range.
Based at mountainous province of Guizhou, it produces 7 million pieces yearly including truck, bus, OTR, agricultural, industrial and solid tyres under ‘Advance’ brand with majority of the production comprises of TBRs. It manufactures 4 million TBRs annually and exports 30% of production of all categories of tyres. It operates at 90%+ capacity utilisation levels.