Sailun Tire, a leading Chinese tire manufacturer in overseas expansion, has made another important step in its global layout. Following its pioneering overseas factory construction, Sailun has now set its sights on the North American market.
On December 15, 2023, Sailun Tire announced that its wholly-owned subsidiary Sailun International Holding (Singapore) Pte. Ltd. (hereinafter referred to as "Sailun Singapore") has signed a joint venture agreement with Mexican company TD International Holding, S.A.P.I.DE C.V. (hereinafter referred to as "Mexico TD"). The two parties plan to establish a joint venture to invest $2.4 billion (about RMB 1.708 billion) to build a semi-steel radial tire project with an annual production capacity of 6 million tires.
According to the announcement, the registered capital of the proposed joint venture is $1.2 billion, with Sailun Singapore and Mexico TD holding 51% and 49% shares, respectively. The two parties will purchase the production capacity of the joint venture according to their respective shareholding ratios. Mexico TD will provide support for the administrative management, processing, and maintenance of external relations of the joint venture. The project construction period is 12 months.
Industry insiders believe that Sailun Tire's decision to establish a joint venture with a local Mexican company can effectively reduce investment costs, facilitate capacity digestion, and avoid trade risks. The deep involvement of the local company is conducive to the smooth progress of the project and the subsequent release of capacity. In addition, Mexico is located in the global market with more influence, and it is adjacent to the United States. "Landing" in North America may become a significant step in the company's global strategy.
Sailun Tire's Mexico Project: A Profitable and Strategic Move
Sailun Tire, a leading Chinese tire manufacturer, has made a significant move in its global expansion strategy. The company has announced plans to build a semi-steel radial tire factory in Mexico with an annual production capacity of 6 million tires. The project is expected to cost $2.4 billion (about RMB 1.708 billion) and will be completed within 12 months.
The project is expected to be profitable for Sailun Tire. According to the company's announcement, the project is expected to generate annual revenue of $2.19 billion (about RMB 15.61 billion) and net profit of $40.59 million (about RMB 2.89 billion) after it reaches full capacity. The project's after-tax payback period is estimated to be 6.33 years, and its net profit margin is expected to be 18.5%.
The local partner, TD International Holding, is a Mexican tire distributor with a strong network and local operating experience. The company's subsidiary, Tire Direct, is the largest tire distributor in Mexico. The partnership is expected to provide Sailun Tire with access to local markets and resources, as well as support for administrative management and external relations.
The project is also seen as a strategic move for Sailun Tire. The company is seeking to expand its presence in the North American market, which is the world's largest tire market. The project will allow Sailun Tire to serve North American customers more quickly and efficiently, and it will also help the company to comply with trade barriers and compete more effectively in the region.
In addition to the semi-steel radial tire production capacity, the joint venture is also considering building a 1.65 million-unit full-steel radial tire production line. This would help Sailun Tire to expand its presence in the North American original equipment market.
Mexico is a promising destination for tire manufacturers.
The country is located in North America, close to the United States, which is the world's largest tire market. Mexico also has a number of advantages, including a strong economy, a skilled workforce, and a favorable trade environment.
Sailun Tire is not the only tire manufacturer that is investing in Mexico. Other companies, such as Bridgestone, Continental, and Michelin, have also established factories in the country. The growing investment in Mexico is a sign of the country's potential as a global tire manufacturing hub.
Sailun Tire is a pioneer in overseas tire manufacturing. The company's success in Vietnam and Cambodia has demonstrated its ability to operate effectively in overseas markets. The Mexico project is a further step in the company's global expansion strategy.
The translation is accurate and comprehensive. It conveys the key points of the Chinese text, including the economic benefits of the project, the strategic importance of the project, and the advantages of Mexico as a location for the project.
Reference:http://www.6300.net/info/detail_238443.html
