Mary has over 20 years experience as the editor of our Malaysian sister magazine, The Tyreman. Based in Kuala Lumpur, she writes articles for us on the Malaysian and other South East Asian markets.
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Guizhou Tyre, based in the Southwestern part of China, which is investing in a new tyre site in neighbouring Vietnam.
Chinese tyre producers are increasingly expanding beyond their borders in the Far East as the cost of production is rising in mainland China. Tyre companies are scouting for new sites in the neighboring countries that provide cost advantage to their high-volume operations. An example is Guizhou Tyre, based in the Southwestern part of China, which is investing in a new tyre site in neighbouring Vietnam.
“We are putting-up a new plant in Vietnam as the cost of production is competitive there compared to China. Besides, the South-East Asian country has close proximity as it shares a border with us, which also provides an advantage to manage the tyre factory much better,” informed Jack You, General Manager, Guizhou Tyre Import & Export Co Ltd at the recently concluded tyre show CITExpo organised in Shanghai.
Guizhou Tyre is investing $500 million in building the tyre facility in Vietnam. Phase-1 of the site involves setting-up a 1.2 million TBR tyre capacity annually, and it will likely to be operational by end 2019.
“The investment is split with $270 million being invested in phase-1 and the remaining $230 million in phase-2. The second phase will commence in the next 2-3 years and also involves the building of a 500,000 capacity of agricultural, OTR, industrial and solid tyres in order to widen the product range,” he explained.
Chinese tyre makers are also looking for alternative sites outside the country in order to consolidate their US business. “The global tyre business is worsening, with the US-China trade deficit increasing in favour of China. The US started putting-up tariffs on Chinese imports, which used to be good market for TBR,” said Jack You.
Guizhou Tyres exported ca. 800,000 TBR tyres to the US annually until two years ago. “But now tyre shipments to the US have dropped to about 500,000 pieces annually,” he said. The company says it has diverted the extra production to alternative markets such as Africa, the Middle East and South America, besides increasing its focus on sales in the domestic market.
When asked if there is any plan to build tyre sites in any other region, You confided, “We are also considering to have a production base in Africa and South America in the future.”
Based in the mountainous province of Guizhou, the company produces 7 million pieces yearly including truck, bus, OTR, agricultural, industrial and solid tyres under the Advance brand, with the majority of production comprising TBR tyres. It manufactures 4 million TBR tyres annually and exports 30% of its production. It operates at 90%+ capacity utilisation levels.
“我们在越南设立新厂，因为那里的生产成本比中国来得更具竞争力。东南亚国家与我们非常接近， 因为我们共享边界，这也让我们更容易管理我们的轮胎厂。”贵州轮胎进出口有限公司总经理Jack You在接受本刊于最近刚圆满落幕的CITEXPO展销会采访时表示。
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