Doublestar Group to bring new products to U.S.

SNUOL DISTRICT, Cambodia—Remember us?

China's century-old Qingdao Doublestar Group, whose growth in the U.S. was stymied by elevated import duties for a decade, is ready for a strong return in America.

The Qingdao-based company recently began construction on a tire plant in Cambodia's Snuol District that will mostly make products for the American market. The new factory, designed with a nameplate annual capacity of 7 million passenger and 1.5 million radial truck/bus (TBR) tires, is a joint venture involving Doublestar and Cambodia's U.B.E. Development Co. Ltd.

Doublestar plans to start TBR tire production near year-end, with passenger tire production to start in the first quarter of 2024.

The project carries a budget of $210 million, Doublestar Tyre said. The plant will span 4.3 million square feet when complete.

Linda Deng, Doublestar vice president and chair of Doublestar Cambodia, said the best avenue for the Chinese company to grow internationally is in America.

The world economy is not doing well after the pandemic and total demand is down, she said, especially with logistics and construction which, in turn, had an impact on TBR production. In this environment, she said, Doublestar seeks to scale up.

"The U.S.A., we believe, is one of the biggest markets in the world, especially the tire demand. So, the American market is the most important to us," she said. "We think that more small players may close their factories, and the big ones will survive."

The new facility will "mostly" serve North America, but also will include some products for Europe and Asia. Deng said all of the products built in Cambodia will be new to the market—designed from the ground up.

Doublestar brands and private-label brands will be produced there. Doublestar, which owns a large share of South Korea's Kumho Tire Co. Inc., said there are no plans to build Kumho tires at the site, but it didn't rule that out in the future. Kumho produces tires for North America at its plants in Macon, Ga., and Ben Cat, Vietnam.

Deng said there has been a vast improvement in the supply chain so far this year. Shipment time from Asia to the U.S. West Coast is around 20 days, and to the East Coast 30 days, she said.

One new product to be built at the Cambodia plant will be Doublestar's purpose-built electric-vehicle (EV) tire for the U.S. market, which is being designed initially in the six most popular sizes.

"The EV tire is different than a normal tire," Deng said. "We use a special compound to make the tire lighter to save electricity. And, the second is the noise—EV tire noise must be much lower to make a better experience for the drivers."

The tire, she said, is very popular in the Chinese market, and Doublestar expects the North American version to do the same when released.

"The EV market in China, right now, is bigger than the traditional (internal combustion engine) car," she said. "More than 50 percent is EV tire."

She said that because most of China's population lives, works and travels near large city centers, they don't have the same long-distance travel concerns that have slowed U.S. adoption.

Doublestar has sold tires in the U.S. since 2010.

"So, we have many great dealers in the U.S., and so also they are excited, too, for us to come back stronger in the market," Joshua Liu, overseas channel director for Doublestar, said.

"We believe our products speak for themselves, and we are 100 percent sure—very confident—that we will perform well in the U.S. market," Liu said. "We understand the U.S. market is very well developed and requires a high-quality tire. So, we are happy to be a good player in this market again."

Doublestar's through-channel is progressing, he said, explaining that there are really two channels in the U.S. now for both the Doublestar brand and private-label brands the company produces.

The company has been going through an evolution since 2014, when it decided to replace its aging production with "smart" enterprises. In 2020, the firm started implementing a full-modernization strategy, based on the ecological, high tech, localization and digitalization.

Doublestar is considered the world's 29th largest tire maker, based on 2021 revenue of $1.16 billion.

Cambodia is not only an ideal country to build tires for the U.S., it is also much closer to the raw materials, Deng said.

"We have three industries," she said. "First is tire business, second is smart equipment. The third is green tire recycling, which means we take back used tires and break them down for the carbon black, the oil and the steel. We will make full use of the wasted tire."