DEZHOU, China — China's Linglong Group Co. Ltd. is planning to expand truck and bus tire production capacity at a factory in Dezhou, Shandong, by 60%, with a $62 million investment over the coming 12 months.
The tire maker — ranked 12th globally based on 2020 sales of $2.75 billion — started an environmental impact public review process for the project in September and expects to break ground soon, Linglong said. The expansion, to be housed in 2.2 million square feet of new manufacturing space, will create up to 284 jobs.
The expansion will add up to 1.2 million units of new radial truck/bus tire capacity at the factory, where Linglong phased out bias-ply truck tire capacity a year ago. The site in Dezhou has nameplate capacities of 10 million passenger and 2 million truck/bus tires per year.
The project falls under a "capacity replacement" program to substitute bias tire production. In 2020 Linglong phased out 4 million units of annual bias-tire capacity at the site.
When in full operation, the expansion is expected to generate $10 million in annual profits from $30 million in revenue, Linglong said. Dezhou is a "prefecture-level" city in northwestern Shandong province with a population of 5.7 million.
The new capacities represent 283,000 metric tons of rubber consumption, Linglong said, whereas the phased-out production used about 297,000 tons of rubber compound.
Linglong Group only recently disclosed plans to build a passenger and truck/bus tire plant in Hefei, Anhui Province, that will become its seventh tire factory in China when it starts production.
The new plant, for which Linglong has budgeted $800 million, is projected to have capacities of 12 million passenger and 2.6 million truck/bus tires a year when it reaches full capacity by 2027.
The Hefei plant announcement is the latest in company's "7+5" business strategy announced earlier this year, which calls for seven plants in China and five others globally by 2030.
Linglong has four factories in China now — in Zhaoyuan, Dezhou, Liuzhou and Jingmen — with a fifth under construction in Changchun City, in northeastern China, and a sixth to be built in the central China province of Shaanxi for radial truck tires and retreads.