China’s Shenma Industry, with its core business in nylon cord for tyres, is to invest around US$35 million to build a yarn factory in Thailand to side-step international trade barriers and better meet demand from overseas tyre suppliers, it says.
The plant will be located in an industrial park in Thailand’s Eastern Economic Corridor and make 20 kilotonnes/year of nylon. It will produce two kinds of nylon yarn in the first phase, with combined annual capacity of 10 kilotonnes and a construction period of 15 months, it added.
The project will likely bring annual revenue of CNY317 million and a profit of US$8.2 million, with an estimated payback period of around seven years, the company noted, citing the project’s feasibility report.
Shenma will use nylon chips from its factories in China as raw materials at the Thai plant, it said, noting that the products will be made mainly for local tyre makers and exports to North America.
The project will allow Shenma to effectively avoid and resolve the trade barriers its products meet in the US and Europe, according to the company. In addition, Thailand is developing into a production hub for Chinese and global car tyre makers, it noted.
Shenma, one of China’s leading suppliers of nylon yarn and related products, has an annual production capacity of 162,000 tonnes.
Its customers include well-known tyre producers such as France’s Michelin, Japan’s Bridgestone, and US Goodyear Tire and Rubber.