SHANGHAI, China — China's Sailun Group has selected Indonesia as the site for the next phase of its overseas expansion strategy, budgeting $250 million for a multi-product tire factory that could be in production as early as late 2025.
The new facility will have an annual capacity of 3 million passenger car radial tires, 600,000 truck and bus radial tires and 37 kilotons of off-highway tire projects, Sailun said in a stock exchange announcement.
To be located in Demak City, Central Java province, the factory is expected to be constructed within 21 months, according to the statement.
Elaborating on its decision, Sailun said Indonesia had "abundant labor and natural resources … providing unique advantages for the development of the manufacturing industry."
Furthermore, it said, recent investments by automotive manufacturers in Indonesia offered significant growth opportunities in tire manufacture.
Sailun, the No. 12 tire maker worldwide with 2022 sales of $3.3 billion — is the second Chinese tire maker to announce expansion into Indonesia over the recent months. In February, Zhongce Rubber Group Co. Ltd. — China's largest tire producer and no. 9 worldwide — unveiled plans to build a tire plant in the country.
Sailun has been stepping up its overseas plans of late: most recently announcing a decision to expand into North America through a Mexican joint venture project.
In addition to its three facilities in China, the manufacturer operates an overseas unit in Vietnam and has a project under way to build another greenfield plant in Cambodia.
Indonesia already is among the largest exporters of passenger and light truck tires to the U.S., according to Department of Commerce data. Last year it was the third largest source of imported passenger tires at just shy of 14 million units and was No. 7 in light truck tire imports at 1.75 million units.
