Linglong Tire has approved a US$270m passenger tyre manufacturing project in Borg El Arab, Egypt, with planned annual capacity of six million semi-steel radial tyres. The company is positioning the plant to serve Egypt, Europe, the Middle East and Africa, citing lower logistics costs, faster supply-chain response and reduced exposure to international trade barriers.
Shandong Linglong Tire’s board approved the investment on 23 September, moving the company’s Egyptian manufacturing plans from a broader industrial proposal to a defined project with specified capital expenditure, capacity and location.
The plant will occupy approximately 251,460 sq m in Borg El Arab, Alexandria, and has a planned construction period of two years. Linglong said the project remains at the preparatory stage and still requires approvals or filings from relevant authorities in China and Egypt.
Once fully operational, the facility is planned to produce six million semi-steel radial tyres annually. Linglong forecasts annual revenue of US$173.3m and net profit of US$34.6m, with a projected investment return of 13.67%. Those figures are company forecasts rather than operating results, and Linglong cautioned that market conditions, competition, supply-chain costs and other factors could affect eventual returns.
Linglong’s official investment announcement
The market purpose is unusually explicit for a factory announcement. Linglong said the project will serve Egypt as well as Europe, the Middle East and Africa. It identified Egypt’s position between Asia, Africa and Europe, access to the Suez Canal and port infrastructure as factors that could shorten transport routes, reduce logistics costs and improve supply-chain responsiveness.
The company also said regional production could help mitigate uncertainty associated with existing and potential international trade barriers. That makes the Egyptian plant more than an additional overseas production line: Linglong is locating capacity closer to several of the markets it intends to supply.
Egypt’s trade arrangements add to that positioning, although the benefits require qualification. The EU-Egypt Association Agreement removes tariffs on industrial products that qualify for preferential treatment, but eligibility depends on the applicable rules of origin. Egyptian manufacture can therefore provide a route to preferential EU access where those requirements are met, rather than making duty-free entry automatic.
The US$270m project should also be distinguished from the much broader Linglong Group industrial-complex proposal reported earlier this month.
TNM previously reported that Linglong Group had signed an MoU with Egypt’s Ministry of Industry covering a proposed integrated complex involving passenger-car, truck and bus and equipment tyres, conveyor belts and upstream materials including carbon black and steel cord. That framework was expected to attract around US$2bn of investment but remained at an early stage without a final manufacturing capacity or construction timetable.
Linglong Signs MoU for Proposed $2bn Egypt Tyre Complex
The newly approved project is more concrete. It defines the listed tyre company’s investment, site, capacity and intended markets while stopping short of establishing that the entire US$2bn industrial concept is committed.
It also adds to a growing concentration of Chinese tyre manufacturing plans in Egypt. Sailun has substantially expanded its proposed Egyptian capacity, while ZC Rubber is studying a US$500m export-oriented complex in the Suez Canal Economic Zone. TNM has previously examined both developments as evidence of manufacturers placing new capacity closer to European, Middle Eastern and African markets.
Tags: Linglong Tire, Egypt tyre plant, Borg El Arab, tyre manufacturing, PCR tyres, EMEA tyre market, Chinese tyre manufacturers, Egypt manufacturing, tyre supply chain, tyre investment
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