China’s ZC Rubber to expand to Indonesia; Mexico (updated)

China’s ZC Rubber to expand to IndonesiaChinese tyre manufacturer, headquartered in Hangzhou, Zhongce Rubber Group Co. (ZC Rubber) says it is expanding its global presence with the set-up of a factory in Semarang, Indonesia. The new facility, located in Semarang and covering 500,000 sq m, is currently under construction and expected to complete construction within 10 months. Meanwhile, it has also announced a plant in Mexico, in Saltillo, in the state of Coahuila, with a potential size of up to 600,000 sq m. It will also build a North American warehouse centre adjacent to the factory to improve the local distribution network and optimise cost efficiency

Henry Shen, Vice President of ZC Rubber, expressed the company’s enthusiasm, stating, “We are thrilled to establish our presence in Indonesia, reinforcing our commitment to delivering high-quality tires to meet the demand of both local consumers and key overseas markets such as the United States. This investment showcased our commitment to excellence and marks a pivotal step in our global expansion strategy.”

The strategic location of the new factory offers trade advantages and access to natural rubber resources, positioning Indonesia as an ideal hub for ZC Rubber’s ambitious growth plan.

The company says it will be equipped with cutting-edge digitalised technology and staffed by highly skilled professionals. The production at this new facility will address the local demand for tyres across everyday consumer applications and logistical needs.

With the Mexican plant, ZC Rubber would become the second Chinese tyre maker in Mexico, joining Sailun Group that signed a joint-venture agreement in December with Mexico’s TD International Holding S.A.P.I. de C.V. for the construction of a car tyre plant in León, in the central Mexican state of Guanajuato.

ZC Rubber already operates an overseas unit in Rayong, Thailand, equipped with the capacity to manufacture 11 million units/year. This production facility caters to a diverse range of tyres, including those for light vehicles, trucks and buses, two-wheelers, earthmovers, and industrial applications.

ZC Rubber’s global expansion efforts have been an integral part of its long-term growth strategy. The company, with nine tyre plants in operation within China, expressed its aspirations last year to establish production facilities in North America and subsequently in Europe. These plans were outlined as part of a comprehensive 10-year growth strategy.

ZC Rubber’s international expansion programme was closely tied to its intentions to launch an Initial Public Offering (IPO). However, this plan has been put on hold due to the downturn in Chinese equity markets.