On the evening of August 14, Sailun Group Co., Ltd. announced that it plans to invest US$291 million to build a new production base in Egypt with an annual output of 3.6 million radial tires to meet local market demand and deepen its global layout.
According to the announcement, the project plans to produce 3 million PCR tires and 600,000 TBR tires annually, and is located in the Egypt’s Suez Canal Economic Zone. The project construction period is 18 months, and the required funds will be obtained through the company's own funds and loans from financial institutions. To this end, Sailun Tire plans to increase capital in its related subsidiaries with a total amount not exceeding US$173 million.
Financial forecasts show that the project is expected to achieve an average annual operating income of approximately US$190 million, an average annual net profit of US$34.77 million, a net profit margin of up to 18.30%, and an investment payback period of approximately 6.15 years, showing good profit prospects and investment value.
Sailun Tire analyzed that the construction of the plant in Egypt is an important step in the company's globalization strategy. Egypt is located at the intersection of Asia, Africa and Europe, and is close to the Suez Canal. It is not only the third largest automobile market in Africa with strong demand for tires, but also a strategic hub connecting the European, African and Middle Eastern markets. By establishing a production base here, the company's products can be efficiently distributed to neighboring countries and regions, achieving localized operations close to the market and quickly responding to customer needs.
As the first Chinese tire company to build factories overseas, Sailun Group has established production bases in four countries, including Vietnam, Cambodia, Mexico, and Indonesia. It has accumulated rich experience in overseas project construction and operations, and has gradually formed a mature system covering supply chain management, localized production, and cross-cultural operations.
Sailun Group stated that the investment in building a tire production base in Egypt will not only enable it to accurately capture overseas demand and quickly respond to downstream customers' demands through localized operations close to the market, and continuously strengthen its comprehensive service capabilities for core customers, but will also rely on Egypt's location and policy advantages to radiate the tire markets of neighboring countries and regions, thereby driving continued growth in product production and sales.
After the completion of the tire project, it will not only meet the continuously growing product demand in overseas markets, but also improve the ability to cope with international trade barriers through localized production overseas. It is of great significance for enterprises to enhance their global competitiveness and expand international markets.
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