Firemax to pump in US$190 mn in tyre facility in Cambodia

Firemax to pump in US$190 mn in tyre facility in CambodiaChinese tyre maker Shouguang Firemax intends to invest in a new production facility in Cambodia, according to a filing with Chinese tax authorities. The company expects to invest US$190 million in the tyre facility with an expected capacity of 8 million passenger car radial tyres/year and 1.2 million truck and bus radial tyres/year upon completion.

Wang Guangjie, the Financial Director of Firemax, emphasised the significant financial commitments associated with building production lines, acknowledging the substantial investments and lengthy payback cycles involved. He expressed gratitude for the proactive support from tax officials who, in his words, have “taken the initiative to answer policy questions and teach us step-by-step how to receive tax benefits.” Wang Guangjie conveyed the company’s confidence in the current investment endeavour.

Headquartered in Shouguang, Weifang, Shandong province, Firemax presently operates a tyre production facility in China with the capability to produce 12 million units of passenger car tyres/year and 1 million truck and bus tyres/year. The US$190 million investment in the Cambodian production facility aligns with the broader trend of Chinese tyre manufacturers venturing into Cambodia, spurred by the tightening trade barriers in western markets, particularly the US and Europe, against Chinese tyre imports.

For instance, Wanli Tire is currently in the final stages of feasibility studies for a US$500 million tyre factory project in Cambodia. Similarly, Sailun, another major player in the Chinese tyre industry, has disclosed plans to double the size of its expansion project in Cambodia, committing to a EUR290 million investment. The announcement underscores Sailun’s commitment to the Cambodian market amid evolving trade landscapes.

General Science from China has also joined the wave of expansion into Cambodia, unveiling a EUR200 million expansion project only months after initiating operations in the Sihanoukville Port Special Economic Zone.

As well, Qingdao Double Star has also revealed plans to construct a EUR196 million greenfield tyre manufacturing plant in Cambodia. The company is tying up with a local company Ube Development Co.

The surge in Chinese tyre manufacturers’ interest in Cambodia reflects a broader industry strategy to diversify manufacturing locations, mitigate risks associated with trade barriers, and tap into emerging markets.