SHANGHAI — Sailun Group Co. Ltd. — the No. 12 tire maker globally — has signed a joint-venture agreement with Mexico's TD International Holding S.A.P.I. de C.V. for the construction of a car tire plant in León, in the central Mexican state of Guanajuato.
The project is estimated to cost $240 million and take 12 months to complete, Sailun said in a Dec. 16 filing on the Shanghai Stock Exchange.
The factory will be designed with an initial annual production capacity of 6 million units passenger tires per year, Sailun said, with the possibility of adding capacity for 1.65 million truck/bus tires in the future.
To be named SL & TD Tire Manufacturing, the JV will be 51% owned by Sailun's Singapore subsidiary, while local enterprise TD Mexico will own the remaining 49%, Sailun said.
Sailun will support the project in terms of construction, equipment installation and production, while TD Mexico will provide admin support in terms of managing, processing and maintaining external relationships.
The decision to establish a factory in Mexico is a strategic move aimed at enhancing Sailun’s production capabilities and streamlining the supply chain to provide customers with even better service and more efficient delivery of products.
“This new facility will be equipped with state-of-the-art technology and staffed with highly skilled professionals who are committed to maintaining the high standards of quality and innovation Sailun is known for,” Sailun Tire Americas President Peter Koszo said.
“This expansion will not only allow us to meet the increasing demand for our products but also enable us to design, test and now build products for North America, in North America.”
The factory at full capacity would provide employment for up to 678 hourly and salaried workers, the Sailun filing states. and generate nearly $220 million in annual revenue.
Sailun is considered the world's No. 12 tire maker based on fiscal 2022 sales of $3.22 billion, according to Tire Business' annual Global Tire Rankings.
According to Sailun, TD Mexico will also support the project via its subsidiary Tire Direct, which is claimed to be "the largest tire dealer in Mexico."
Sailun expects the project to provide "faster and better market services to customers in North America and improve its customer base in the region."
The investment will also enable the company to respond to "international trade barriers" and improve its competitiveness and market-share, Sailun added.
Word o the Mexican manufacturing venture complements plans Sailun Tire Americas disclosed in mid-2022 to open a North American research and development center in Chattanooga, Tenn.,
Dubbed the Sailun Tire Americas Technical Center (SATC), the 22,380-sq.-ft. structure is meant to serve as a hub of innovation for original equipment and replacement tires across a number of sectors including cars, CUVs, SUVs, light trucks, trucks and buses, and electric vehicles, STA said.
Mexico also is evaluating raising import duties on tires from China.
Qingdao-based Sailun's business in North America is handled through Sailun Tire Americas of Brampton, Ontario, with U.S. sales assigned to TBC Corp.
Earlier this year Saiun disclosed it was adding an associate brand, RoadX, in the U.S. primarily through a distribution agreement with the Independent Tire Dealers Group (ITDG).