BEIJING — Shandong Linglong Tire Co. Ltd. has signed an investment framework agreement with the Serbian government covering the Serbian tire plant project announced in August, but the parties did not disclose details.
The agreement as signed by Linglong Chairman Wang Feng and Siniša Mali, Serbia's finance minister. Serbian President Aleksandar Vucic also attended the signing and, according to Linglong, said he would "fully support Linglong's Serbian project to complete construction and start operation as soon as possible."
The Chinese tire maker announced plans in August to build a $994 million car and light truck tire plant in Serbia's Zrenjanin Free Trade Zone in Serbia.
The construction of the Serbian manufacturing base will further develop the company's European markets, according to Linglong.
"Direct sales from Serbian factory to OEMs and retail distributors in and around Europe will serve customers faster and more effectively and reduce logistics costs," it added.
Linglong said the Serbian project also can promote the deeper cooperation between Linglong and some European auto makers, such as Volkswagen A.G. and VW's Audi brand.
Linglong expects to start construction work on the plant — the company's first European unit — next April.
The 6-year project will be completed in three phases, and at full capacity the factory will be rated at 13.6 million units a year: 12 million passenger car, 1.6 million truck/bus and 20,000 off-the-road tires.
Full completion of three phases is set for 2025.
Linglong is considered China's second largest tire maker and No. 17 globally with 2017 sales of $2.18 billion, according to Tire Business' latest Global Tire Report.