Chinese tyre manufacturer Sailun Group is set to collaborate with the owner of Mexico’s largest tyre dealership to construct a USD240 million automotive tyre plant in Mexico.
Sailun to Enhance Production Capacity
The goal is to enhance their capacity to navigate international trade barriers.
Sailun‘s Singaporean division will partner with TD International Holdings to establish a plant in Leon, Guanajuato State, Mexico, with an annual production capacity of six million semi-steel radial tyres for the North American market. The construction timeline is projected to be 12 months.
In this joint venture, Sailun‘s unit and TD International will invest, build, and operate the plant. Sailun will hold a 51 per cent stake in the JV, with TD International owning the remaining 49 per cent. Both parties are also exploring the possibility of constructing another plant capable of producing nearly 1.7 million all-steel radial tyres.
Semi-steel radial tyres are primarily used for sedans or light trucks, while all-steel radial tyres are typically utilised for heavy-duty trucks or construction machinery vehicles.
Upon reaching its specified annual capacity, the plant is anticipated to generate a net profit of USD40.6 million and annual revenue of USD219.4 million, with a post-tax payback period of 6.3 years, according to Sailun.
TD International‘s subsidiary, Tire Direct, holds the position of Mexico’s largest tyre dealer, boasting a comprehensive sales network and extensive local operational expertise. Sailun emphasised that Tire Direct has been a longstanding partner of Sailun‘s Singaporean unit.
In addition to its four production facilities in China, Sailun has overseas production bases in Vietnam and Cambodia. In the previous year, the company’s overseas sales accounted for 78 per cent of the total, reaching CNY17 billion (USD2.4 billion), as per Sailun‘s latest annual report.
