ChemChina planning new aircraft tire production facility

SHANGHAI—ChemChina aircraft tire subsidiary Shuguang Rubber Industry Research & Design Institute is to establish a new production facility for civil aviation tires in partnership with engineering company Haohua Chemical Science & Technology Corp.

Under the deal, the two companies will establish Sinochem Sanhuan (Guilin) Aviation Tire Co. (tentative name) to produce 100,000 high-performance aircraft tires in Yingcai Science & Technology Park, in Guilin City, Guangxi Province.

The $96 million project will be built at Shuguang's existing production site and will manufacture 50,000 new aircraft tires and 50,000 retreaded tires, said a Haohua filing with the Shanghai Stock Exchange.

To be completed in 21 months, the facility will employ Shuguang's "self-developed patented technology" to produce the tires, the announcement added.

According to the companies, China relies heavily on imports for its civil aviation tires and the new investment will "usher in new opportunities."

The estimated total annual profit of the project is about $26 million, and the average annual net profit is $20 million.

Shuguang Rubber Industry Research & Design Institute was established in the early 1970s and started production of aircraft tires at its production site in Guilin in 1992 through its Guilin Lanyu Aircraft Tire Development operations.