SHANGHAI, China—China's Sailun Group has selected Indonesia as the site for the next phase of its overseas expansion strategy, budgeting $250 million for a multi-product tire factory that could be in production as early as late 2025.
Located in Denmark City, Central Java province, the new facility will be designed with annual production capacities of 3 million passenger car radial tires, 600,000 truck and bus radial tires and 37 kilotonnes of off-highway tire projects, Sailun said in a March 12 stock exchange announcement. The factory is expected to be constructed within 21 months.
The tire maker said it selected Indonesia because it has "abundant labor and natural resources … providing unique advantages for the development of the manufacturing industry." And recent investments by automotive manufacturers in Indonesia, it added, offered significant growth opportunities in tire manufacturing.
Sailun—the No. 12 tire maker worldwide with 2022 sales of $3.3 billion—is the second Chinese tire maker to announce expanding into Indonesia over the recent months. In February, Zhongce Rubber Group Co. Ltd.—China's largest tire producer and No. 9 worldwide—unveiled plans to build a tire plant in the country.
Sailun has been stepping up its overseas plans of late, most recently announcing a decision to expand into North America through a Mexican joint venture project.
In addition to its three facilities in China, the manufacturer operates an overseas unit in Vietnam and has a project under way to build another greenfield plant in Cambodia.
Indonesia already is among the largest exporters of passenger and light truck tires to the U.S., according to Department of Commerce data. Last year it was the third largest source of imported passenger tires at just shy of 14 million units and was No. 7 in light truck tire imports at 1.75 million units.
