On the evening of April 20, Sailun Group Co., Ltd. released a major investment announcement, planning to invest 285.43 million US dollars (equivalent to approximately 1.967 billion RMB) in constructing an expansion project for an annual output of 7.05 million radial tires in Egypt. Supported by self-owned funds, favorable geographic and tariff policies, as well as mature overseas operation experience, the expansion will lift the production capacity of Sailun’s Egyptian base to over 10 million pieces, further improving its global production layout and strengthening core competitiveness in African, European and Middle Eastern markets.
The expansion project is located in the TEDA Industrial Zone of Egypt’s Suez Canal Economic Zone, with a construction period of 18 months. It will add new capacity of 6 million semi-steel radial tires and 1.05 million all-steel radial tires, covering passenger car and truck & bus tire segments. Currently, the Phase I project of Sailun’s wholly-owned Egyptian subsidiary Shams El Sherouk is under steady construction, designed with an annual capacity of 3 million semi-steel tires and 600,000 all-steel tires. Upon full completion of the expansion, the total capacity of the Egyptian base will double, reaching 9 million semi-steel radial tires and 1.65 million all-steel radial tires, building a large-scale intelligent manufacturing hub of Sailun in Africa.
The entire project is fully funded by the company’s self-owned capital, with sufficient cash flow ensuring smooth project implementation. Meanwhile, Sailun has formulated a multi-level cross-border capital increase plan. The capital will be injected step by step from the group to Sailun Hong Kong, Sailun Singapore, Sailun Europe, and finally to the Egyptian project company, precisely meeting the capital needs for construction and operation. The total investment includes 272.3 million US dollars for construction and 13.13 million US dollars for working capital, with a reasonable capital allocation to mitigate construction risks.
Booming market demand and superior trade conditions are the core driving forces for Sailun’s layout in Egypt. As the third-largest automotive market in Africa, Egypt faces a severe shortage of local tire production and relies heavily on imports. In 2024, Egypt imported 7.38 million passenger car tires and 4.01 million commercial vehicle tires, with import volume rising by more than 10% year-on-year. In addition, Egypt’s automotive industry has achieved rapid growth, with local vehicle sales surging by 69.9% year-on-year in 2025. A number of Chinese automotive brands have launched local assembly projects, continuously driving incremental demand for tire supporting. The new production capacity is expected to meet over one-third of Egypt’s local import substitution demand, promising broad market prospects.
Strategic location and preferential trade policies greatly enhance the project’s value. Adjacent to the Suez Canal, the Egyptian base enjoys convenient shipping logistics and lower cross-border transportation costs. Benefiting from multiple free trade agreements, Egyptian-made products can gain low-tariff or even zero-tariff access to the European market via the EU-Mediterranean Partnership Agreement, effectively avoiding EU trade barriers against Chinese tires. As a member of the Arab Free Trade Area and the African Continental Free Trade Area, Egypt also serves as a key hub radiating the Middle East and North Africa. Through local manufacturing, Sailun has successfully optimized market access in Europe and Africa, realizing a strategic upgrade from product export to localized production.
The project delivers strong profitability and scale advantages. According to internal estimation, the expanded project is expected to generate an average annual operating income of 367.88 million US dollars and an average annual net profit of 61.5 million US dollars, with a post-tax investment yield of 21.55%. Large-scale production will reduce unit manufacturing costs and strengthen cost advantages in raw material procurement, logistics and operation, providing solid momentum for the company’s long-term performance growth.
As China’s first tire enterprise to build overseas factories, Sailun has established mature production bases in Vietnam, Cambodia, Indonesia and Mexico. The Egyptian expansion fills its capacity gap in Africa and peripheral European regions, forming a global production matrix covering Asia, North America and Africa.
Industry analysts pointed out that localized overseas production has become a key strategy for tire manufacturers to cope with global trade frictions. Sailun’s diversified global layout enables flexible responses to regional policy changes and market fluctuations, reducing operational risks. With the gradual release of production capacity in Egypt, Sailun will further expand its global market share, enhance overseas brand influence, and accelerate its development into a leading global tire manufacturer.
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