QINGDAO, China—Sailun Jinyu Group Co. Ltd. will invest up to $200 million into a building a second plant in Vietnam that will manufacture radial truck and off-the-road tires, according to information disclosed at the firm's recent shareholders' meeting.
The Chinese tire manufacturer said the Vietnam project will produce 1.2 million truck-bus tires per year and OTR capacity of 30,000 tons per year.
The project will be implemented by the company's fully-owned subsidiary Sailun (Vietnam) in Go Dau, Tay Ninh province and built at its current site, according to Sailun's announcement.
Construction of the new project is scheduled to take three years, and the new facilities are expected to bring in $23 million annual profit on $250 million revenue when in operation.
The project will be able to tap into Vietnam's local natural rubber resources, and the products are planned for Vietnam as well as overseas markets such as South America, North America and Europe with protective trade policies against Chinese tires, said the announcement.
Sailun Jinyu also expects that building the plant on its existing site will help cut production costs and allow to take advantage of Vietnam's local tax incentives.
Sailun opened its first plant in Vietnam, for radial car, truck and OTR tires, in November 2014. The plant, on a 145-acre site in the Phuoc Dong Industrial Park in Tay Ninh Province, was rated at 7.8 million tires a year in the first phase.