Guizhou Tyre to invest in tyre facility in Vietnam

Guizhou Tyre to invest in tyre facility in VietnamChina’s Guizhou Tyre is planning to invest US$228 million to build a new factory in Vietnam. The tyre maker plans to set up the new automated production factory near its plants in T?nh Ti?n Giang, it said recently. The plant will have a capacity of 6 million semi-steel radial tyres/year used in passenger cars and cater to overseas markets.

Guizhou Tyre’s first Vietnam factory has an output capacity of 1.2 million all-steel radial tyres/year, generally used in commercial vehicles. Its other plant makes high-performance all-steel radial tyres and can turn out 950,000 units/year.

The new project is expected to become operational at 60% of its designed capacity 12 months after construction work starts. It will likely reach full capacity by its fourth year.

The project is likely to average annual sales of US$180 million at full capacity, bringing a profit of US$28.6 million, Guizhou Tyre said. The investment payback period after tax, including construction, is likely just over seven years.

The factory will bolster the production capacity of the entire project area in Vietnam, helping to cut overall production costs, expand the market space, and improve the profitability of Guizhou Tyre’s products, according to the company.

Guizhou Tyre’s main products are used on trucks as well as construction and farm machinery. It also makes specialised products such as for heavy off-road vehicles. The firm produced 7.25 million tyres in 2022, with overseas sales accounting for about 33% of its total output.