Triangle scraps its plans for U.S. tire plant

WEIHAI, China—Triangle Tyre Co. Ltd. has scrapped a project to build a passenger and truck tire plant in the U.S. due to "a change in investment environment."

In a Chinese-language filing with the Shanghai Stock Exchange on May 13, the tire maker said its board of directors had agreed on the withdrawal from the $580 million project in Edgecombe County, N.C.

Announced in November 2017, the project was expected to be completed in five years and ultimately result in factories capable of producing up to 6 million tires a year—5 million passenger and light truck tires and 1 million truck tires.

The company got as far as clearing ground at the 400-acre site in Edgecombe County by mid-2018.

Since then, the company referred to the plant's progress as "stalled" on a number of occasions.

"The North Carolina plant project could not proceed due to the changing investment environment, with factors such as the pandemic severely affecting the project," Triangle Tire USA CEO Campbell Metcalfe said.

"Triangle remains committed to the U.S. market over the long term, and our ability to provide customers with OTR, specialty trailer, TBR and consumer tires remains strong. We appreciate the support of our many customers and look forward to the continued growth of the Triangle brand in the very important American market."

In its stock market filing, the parent company said it and the Edgecombe County government amicably decided to terminate the project to optimize resource allocation and reduce investment risk.

According to the North Carolina Department of Commerce, the state "has processes and protections in place to ensure that incremental job creation and investment targets are met before any state incentive payments are made. For this project, the company did not receive any state incentives."

The property in Edgecombe County is back on the market, according to the Carolinas Gateway Partnership, a non-profit entity that oversees the property and thousands of acres surrounding it.

Triangle Tyre was engaged in trying to make the project work right up to the end, Norris Tolson, president of the partnership said. But it was caught up in the geopolitics of the era under the Trump administration.

The original contract for the project included severe penalties for failing to meet certain deadlines, he said, so Triangle Tyre eventually realized it had no choice but to cancel the contract and relinquish its claims on the property.

Triangle Tyre is considered the 21st largest tire manufacturer worldwide with fiscal 2020 sales of $1.26 billion, according to Rubber News data. Its U.S. headquarters, in Franklin, Tenn., opened in 2016.

The demise of this project is the fourth proposed U.S. tire plant to be scuttled in the past four years. Others are:

• Qingdao Sentury Tire Co. Ltd.—which sells tires under the Delinte, Groundspeed, Landsail and Sentury brand names—declared its proposed U.S. plant project "on hold indefinitely" in 2019, three years after disclosing plans to invest $530 million to build a plant in Troup County, Ga., capable of producing 12 million car and light truck tires a year.

• Guangzhou Vanlead Group Co. Ltd.—a China state-owned entity that controls Wanli Tire Group—pulled the plug in mid-2018 on plans it had announced a year earlier to invest $1 billion in a consumer tire plant in South Carolina, capable of producing 6 million tires annually.

• Balkrishna Industries Ltd. (BKT) suspended in August 2019 a $100 million plan for a U.S. off-highway tire factory the company had disclosed the previous October, citing "business uncertainties" related to difficult macroeconomics and the "volatile" climate conditions.