SVAY RIENG, Cambodia — China's Sailun Group Co. Ltd. started trial production Nov. 18 at the $345 million passenger tire plant it's building in Cambodia.
The factory, in the Qilu Special Economic Zone in Svay Rieng — a city of 500,000-plus located in southeast Cambodia about half-way between Phnom Penh, Cambodia, and Ho Chi Minh City, Vietnam — is the Chinese tire maker's second plant overseas, in addition to one in Vietnam.
When initially announced earlier this year, the factory's capacity was given as 5 million passenger tires a year, but in June Sailun doubled its investment in the project and raised the designed annual capacity to 9 million units.
Sailun said tires produced at the plant would be exported mainly to the U.S. and European markets. Sailun Tire Americas, a Sailun Group subsidiary in Brampton, Ontario, oversees distribution of the Sailun brand in North America. TBC Corp. is the brand's designated distributor in the U.S.
In a statement to European Rubber Journal, Sailun said it sped up construction at the site due to "changes in market conditions and operational goals."
The facility is managed by Cart Tire Co. Ltd., a wholly owned Sailun subsidiary.
The plant is expected to generate $325 million in annual sales with a 17% profit margin.
The new plant becomes Sailun's sixth factory, supplementing the company's 7-year-old plant in Vietnam and four factories in China, including the former Shandong Anchi Tyres Co. Ltd. facility in Weifang, Shandong, that Sailun acquired and reopened earlier this year.
This summer Sailun, the No. 16 tire maker worldwide with fiscal 2020 sales of $2.2 billion, said the investments are part of its global vision plan to "continue delivering top quality production and performance with highly efficient capabilities."
The start of production at the Cambodian plant is in addition to the commissioning of a major expansion of truck tire capacity at its Shenyang, China, factory and the announcement of plans to expand capacities for car, truck and OTR tires at the Vietnam plant.
The Shenyang expansion expended truck/bus tire capacity there by 3.3 million units while the Vietnam project — budgeted at $462 million over three years — will boost annual capacity at the plant by 3 million passenger tires, 1 million truck/bus tires and 50,000 metric tons of OTR tires.
Sailun also is a partner in Vietnam with Goodyear's Cooper Tire & Rubber business unit in A.C.T.R. Ltd., a joint venture truck/bus tire producer. Sailun owns 65% of the venture, which came on stream in late 2020.