Sailun Group invests £99.63 million to upgrade off-the-road tyre production

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Sailun
Published on
January 24, 2023

The Sailun Group has announced a major investment of 833 million yuan (approximately £99.63 million) to upgrade its off-the-road (OTR) tyre production at its Qingdao plant in China.

The upgrade will enable Sailun to produce OTR tyres up to 49 inches in size, and the company plans to complete the upgrade and adjust its production portfolio within a ten-month period.

The project is reported to involve a capacity of 40,000 tonnes per annum, and will not change the overall capacity of the Qingdao plant. Instead, the larger OTR tyres will replace the previous production of 40-inch and below size range. Sailun will also relocate or eliminate some of this original OTR production.

The 833-million-yuan investment includes 726 million yuan of construction investment and 107 million yuan working capital. Sailun estimates that once the upgrade is completed and production commences, it will be able to achieve an annual operating income of 1.315 billion yuan and a net profit of 312 million yuan.

Sailun states that its giant OTR tyres are highly profitable and, after years of hard work, are technically comparable to leading international products. The company anticipates that upgrading the Qingdao OTR facility will enable it to rapidly grow in domestic and overseas markets, further expanding Sailun’s popularity and market influence. Furthermore, Sailun hopes to enhance its core competitiveness and increase market share through the ongoing development of marketable products.

The global off-road tyre market is expected to grow at an annual rate of four per cent from 2021 to 2027, and the market value will grow at a rate of 5.2 per cent. In 2027, the global market for off-road tyres will be about 3.7 million tonnes, according to a recent market report from Smithers Rapra.

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