Linglong abandoned two investment projects

Linglong has abandoned plans to build two new tire plants in China (in Tunchuan, Shaanxi Province) and Brazil, which were expected to have a combined capacity of around 30 million tires per year.

The construction of a new $930 million plant in Shaanxi was announced in 2021, and around $55 million had already been invested, mainly in land acquisition, but Linglong reported that "delays in the preparatory work process have created significant uncertainties regarding the expected return on investment and the conditions for its implementation". The company adds that preliminary agreements have been reached with partners regarding the termination of cooperation.

The Tunchuan plant was expected to become Linglong's sixth production site in China, producing 15.2 million new and 500,000 refurbished tires per year.

The project in Brazil, announced in April last year, was planned to be implemented in conjunction with Paraguayan tire distributor Sunset SA Comercial Industrial Y De Servicios, and the joint venture was expected to produce 14.7 million tires annually, in addition to which the partners also intended to build a new solar power plant. The planned investment volume exceeded $1 billion.

Linglong reports that the parties were unable to agree on key points, such as the share of participation in the joint venture and the terms of cooperation, which is why it will be terminated, which the company calls a "balanced decision made taking into account changes in market conditions". It is also noted that significant investments in the project have not been made, so its freezing should not have a negative impact on Linglong's performance.

Currently, Linglong owns five plants in China and one each in Thailand and Serbia, and the company emphasizes that it continues to invest in modernizing its facilities to increase their utilization.