NUERBURG, Germany — China's Zhongce Rubber Group Co. Ltd.'s ambitious near- to medium-term growth plans could include establishing manufacturing in North America and Europe, company officials stated recently.
Speaking at a July 11-12 customer and media event at the Nuerburgring race track in northwestern Germany, ZC Rubber's marketing director of international business Richard Li said the firm's strategy is to deliver "continuous growth," particularly overseas.
Hangzhou, China-based ZC Rubber, considered the world's No. 9 tire maker with fiscal 2021 sales of $4.5 billion, has stated on a number of occasions in the past its goal is to become the world's No. 5 tire maker within the decade.
As recently as 2021 the company — which goes to market with the Arisun, Chaoyang, Goodride, Trazano and Westlake brands — floated the idea of a plant in the U.S.
Li's comments are linked to ZC Rubber's pending initial public offering (IPO), which the tire maker anticipates being able to complete by year-end, following hoped-for clearance by the country's financial-markets regulator.
ZC's vision is to be a "global leading tire manufacturer [with] the most advanced equipment, best raw materials, leanest management, latest technology, lowest energy and resource consumption and most suitable products."
The focus, Li added, will be on increasing sales volumes and sales of higher-value tires, supported by an expansion of ZC's current production assets — nine plants in China and one in Thailand — with "local production for local markets" as a guiding principle.
Li did not, however, quantify the company's sales expectations for the coming few years. To achieve its goal of becoming a Top 5 global tire maker would require growing the firm's revenue by at least two-thirds over its current sales. Sumitomo Rubber Industries Ltd. is considered the No. 5 producer now, with fiscal 2021 sales of $7.25 billion, according Tire Business' annual Global Tire Report calculations.
Because of the pending IPO, Li said, ZC Rubber can provide only estimated fiscal 2022 revenue of "around $4.2 billion." Of that, international business is "growing quickly," particularly in the U.S. and Europe, and represents over 40% of the firm's overall sales. The goal is to grow that to 60%, Li said.
At $1,782 million, international business accounted for 39.4% of ZC's total sales in 2021, up from a prior-year $1,465 million or a 37.6% share. Group estimates for 2022 indicate overseas sales on track to exceed 44% of total revenues in 2022.
Li's presentation also included figures showing that international unit-sales of truck/bus radials had increased by 13.4% from 2020 to 2022, to 21.2 million tires, while passenger tire sales grew by 21.8% to 59.3 million units.