Sailun Group, is expanding its global footprint with the announcement of a new factory in Mexico. The company, through Sailun International Holding (Singapore) Pte. Ltd., has entered into a joint venture with TD International Holding and Sapide CV, known as TD Mexico. This strategic partnership, finalized on December 15, aims to strengthen Sailun Group's position in the North American market.
New Facility in Guanajuato, Mexico: A Production Powerhouse
The new facility, set to be located in the Marabis Comonfort Industrial Park in Guanajuato state, Mexico, represents a significant investment in the region's industrial capabilities. The partners have committed a total of $240 million to this project, with $192.78 million allocated for the 12-month construction phase. Designed to operate around the clock, 340 days a year, the plant will be a hub of activity with four six-hour shifts. It's expected to generate substantial employment opportunities, creating jobs for 410 production workers and 248 auxiliary staff.
Projected Output and Financial Forecasts
With an initial production target of 6 million semi-steel radial tyres annually, the venture also plans to explore the potential for manufacturing 1.65 million all-steel radials per year in the future. In its first year, the facility aims to achieve 70% of its planned capacity, ramping up to full capacity in the second year. Sailun Group estimates an annual revenue of $219.42 million at full production, with a net profit of $4.06 million.
Strategic Joint Venture Structure
The joint venture, named SL and TD (Mexico) Tire Manufacturing Co. Ltd., reflects a balanced partnership. With a registered capital of $120 million, Sailun Singapore is the majority stakeholder, contributing 51% or $61.2 million. The company will hold significant sway in the joint venture’s Board of Directors, nominating two of the three directors, including the chairperson, while TD Mexico will appoint one.
Enhancing Market Reach and Competitiveness
TD Mexico, the parent company of Tire Direct and the largest tyre distributor in Mexico, brings substantial market knowledge and distribution networks to the table. This venture is poised to significantly bolster Sailun's presence in North America. By capitalizing on the absence of trade barriers and leveraging regional tax policies, Sailun anticipates enhanced competitiveness and efficiency in serving its North American customers.
This new venture marks a significant step for Sailun Group in its ongoing expansion and adaptation to global market dynamics. The strategic location in Mexico, combined with the manufacturing prowess and market access offered by the partnership, positions Sailun Group to effectively meet the growing demands of the North American tyre market.
