Chinese tire manufacturer, Guizhou Tyre Co. Ltd., which makes the Advance and Samson brands, has announced plans to set up a wholly owned subsidiary in Vietnam. This will help Guizhou Tyre to advance further the construction of the truck and bus tire plant which is currently under construction in Vietnam. According to the Global Tire Report published by Rubber News, Guizhou Tyre is the No. 36 tire manufacturer in the world, with fiscal sales of USD 730 million in 2017. While it experienced a net loss of USD 34 million in 2017, last year, Guizhou Tyre experienced a turnaround and posted a net profit of USD 17 million.
The new subsidiary that the company will be setting up in Vietnam will be called Advance Tyre (Vietnam). It will have a registered capital of USD 43 million and its business scope will cover the manufacturing of rubber tires and rubber products, according to the announcement that Guizhou Tyre made recently.
Guizhou Tyre is currently engaged in the construction of a USD 400 million tire plant at the Long Giang Industrial Park in Tien Giang province, near Ho Chi Minh City. The company had announced plans for the plant back in 2017 and it is to be built in three phases. The first phase of the plant is expected to become operational by 2019. As part of phase 2, the company will invest an additional USD 140 million for making 2 million additional tires on an annual basis in addition to the 1.2 million units that was initially planned. The company will set up a rubber processing facility as part of phase 3.
Recently, Guizhou Tyre and a related company, Guizhou Tyre Import & Export Co. Ltd., were imposed US countervailing import duties to the tune of 63.34 percent by the U.S. Commerce Department. This is the highest level of tariffs faced by any tire manufacturer and now the company is focusing on other overseas markets, including Vietnam.
Guizhou Tyre said it expects the Vietnam operation to generate $21 million in annual profit on USD 149 million in sales when operating at full capacity.
“The company has effectively adjusted its product portfolio and regional sales proportion, significantly raised tire sales volume and value and upped profit margin,” it said.
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