CHANGCHUN, China — Linglong Group is planning to build a fifth tire plant in China over the coming five years as part of a revised strategy to build itself into a Top 5 global tire maker, the Changchun-based company disclosed recently.
The new plant, to be built in a Changchung automotive economic zone, represents an investment of $700 million (4.9 billion yuan) and would be rated at 12 million passenger and 2 million truck/bus tires and 200,000 truck/bus retreads, the company said.
Linglong plans to break ground this year on the 600,000-sqm plant and open it in phases through 2025.
Linglong also is in the midst of completing/ramping up its fourth factory in China—a car and light truck tire plant in Jingmen, Hubei Province. At the same time, it is building its second overseas plant, in Zrenjanin, Serbia, that's due on stream in 2025.
Those two project represent investments of $1.2 billion or more.
At the same time, Linglong disclosed its 2020-30 strategic plan, which forecasts sales growth to 160 million units, or $11.5 billion, which the company said would rank it among the industry's five largest manufacturers.
Linglong is considered the world's No. 17 tire maker currently, based on fiscal 2018 sales of $2.32 billion, according to Tire Business' annual Global Top 75 ranking.
Linglong said its sales by 2025 would be split 50/50 domestic/international.
The company's growth strategy has morphed into a "6+6" — six plants in China and six internationally by 2030 — from the "5+3" constellation it had espoused earlier.
The company's new plant will be built in the Changchun Automobile Economic & Technological Development Zone, which also houses a range of auto makers such as FAW-Volkswagen and FAW Jiefang.
The plant is scheduled to come on stream in phases:
- Phase One: 1.2 million truck and bus tires
- Phase Two: 400,000 truck and bus tires and 6 million passenger car tires
- Phase Three: 400,000 truck and bus tires, 6 million passenger car tires and 200,000 retread truck and bus tires
Linglong said it expects the plant to generate €46 million annual net profit on €569 million revenue when in full operation.