Sailun Announces Billion-Dollar Investment in Egypt

Chinese Sailun announced that it intends to invest $1.14 billion in expanding its production capacity in Egypt to meet demand in both African and European and North American markets.

The project will be partially implemented at the Shams El Sherouk Tyre site - a plant currently under construction with a previously announced capacity of 9 million passenger and 1.65 million truck tires, and a new subsidiary, tentatively named Senro Tyre, will be established to produce 18 million passenger and 1.65 million truck tires, as well as 20,000 tons of off-the-road tires per year.

Once all new capacities are put into operation, Sailun will be able to produce 36 million passenger and 3.3 million truck tires, as well as 20,000 tons of OTR tires in Egypt, and the company says that by increasing production, they will be able to "more effectively meet the needs of customers in the global market".

Sailun expects that, given Egypt's location at the "crossroads" between Africa, Asia and Europe, as well as the logistical capabilities of the Suez Canal, the company will be able to optimize the procurement of raw materials, while also improving the efficiency of product supply chains. In addition, the new production is expected to help the company fulfill orders in the region faster and mitigate the impact of international trade barriers.

The new investment project still needs to be approved by Sailun's shareholders, as well as Chinese and Egyptian regulators, and the company notes that changes in market conditions, global economic trends, etc. may affect its implementation.

Sailun is currently building a global production network that will include plants in China, Vietnam, Cambodia, Mexico, Indonesia, and Egypt, and if the capacities in Africa are increased as planned, the company's annual revenue and net profit are expected to increase by $1.16 billion and $170 million, respectively.