Sailun signs JV agreement for Mexico tire factory

SHANGHAI—Sailun Group Co. Ltd., the No. 12 tire maker globally, has signed a joint-venture agreement with Mexico's TD International Holding S.A.P.I. de C.V. for the construction of a car tire plant in León, in the central Mexican state of Guanajuato.

The project is estimated to cost $240 million and take 12 months to complete, Sailun said in a Dec. 16 filing on the Shanghai Stock Exchange.

The factory will be designed with an initial annual production capacity of 6 million units of passenger tires per year, Sailun said, with the possibility of adding capacity for 1.65 million truck/bus tires in the future.

To be named SL & TD Tire Manufacturing, the JV will be 51-percent owned by Sailun's Singapore subsidiary, while local enterprise TD Mexico will own the remaining 49 percent, Sailun said.

Sailun will support the project in terms of construction, equipment installation and production, while TD Mexico will provide admin support in terms of managing, processing and maintaining external relationships.

The factory at full capacity would provide employment for up to 678 hourly and salaried workers, the Sailun filing states, and generate nearly $220 million in annual revenue.

Sailun is considered the world's No. 12 tire maker based on fiscal 2022 sales of $3.22 billion, according to Rubber News' annual Global Tire Rankings. 

According to Sailun, TD Mexico will also support the project via its subsidiary Tire Direct, which is claimed to be "the largest tire dealer in Mexico."

Sailun expects the project to provide "faster and better market services to customers in North America and improve its customer base in the region."

The investment also will enable the company to respond to "international trade barriers" and improve its competitiveness and market-share, Sailun added.

Sailun supplies the U.S. market principally from factories it built in Vietnam and Cambodia after the U.S. imposed elevated import duties on passenger tires from China.

Mexico also is evaluating raising import duties on tires from China.

Qingdao-based Sailun's business in North America is handled through Sailun Tire Americas of Brampton, Ontario, with U.S. sales assigned to TBC Corp.

Earlier this year, Sailun disclosed it was adding an associate brand, RoadX, in the U.S. primarily through a distribution agreement with the Independent Tire Dealers Group.