SHAANXI, China—Shaanxi Yanchang Petroleum Northwest Rubber L.L.C. has finished construction of a tire plant in Xianyang, Shaanxi Province, that is rated at 8 million units a year of radial car tires in the first phase.
The new plant represents a $165 million investment, the company said, and is part of a first phase that also includes a truck/bus radial line that went into operation in 2010, rated at 2 million tires a year.
The firm said this is the first steel-belted radial tire project in Shaanxi Province and the largest tire project in northwest China.
Yanchang Rubber—a state-owned company set up in 2008—said it expects to produce 600,000 steel-belted tires within the first year of operation, all of which are planned for export to North America, Europe and other overseas markets.
It is not known what brand name or names the company will use for export markets, but China Manufacturers Association/Double Coin Holdings Ltd. recently identified the company as the owner of the Duraturn brand name, for which CMA has secured marketing rights in North and Central America.
“Chinese tires are often perceived as low-quality in oversea markets, but most of them have great performances,” said Dong Maohua, vice president of Yanchang Rubber and chief engineer of its steel-belted tire department.
“Such false impression is caused by the price battle among Chinese tire makers and their lack of effective branding strategies,” he added.
The factory just completed is part of a larger $800 million project, which is expected to have a capacity of 4 million units a year of truck/bus radials and 16 million steel-belted car radials when completed.
Yanchang Rubber produces radial tires, rubber hose, rubberized fabric hose, rubber profile, seals and natural rubber planting and processing. It is a successor to Northwest Rubber General Factory, which was founded in 1959.
Other affiliated companies include Shaanxi Yanchang Petroleum Group Rubber Co., Ltd., Kaidi Northwest Rubber Co. and Northwest Rubber Hose Sub-company.