Linglong Announces Plans to Build Fifth Plant in China

The Linglong Group has announced plans to build a fifth factory in China over the next five years as part of its revised strategy to become one of the top five tire manufacturers in the world. The company, which is based in Changchun said that the new factory would be built in the Changchung automotive economic zone.

Linglong plans to invest USD 700 million in the new plant, which once it reaches its full capacity would make 12 million passenger car tires, 2 million truck/bus tires and 200,000 truck/bus retreads. The plant would cover an area of 6.5 million-sq.-ft. plant and if all goes as planned, Linglong would break ground on the plant this year and open it in phases through 2025.

Currently, Linglong is engaged in expanding the capacity of its fourth manufacturing facility in China, a factory located in Jingmen, Hubei province that makes tires for passenger cars and light trucks. It is also building its second facory overseas in Zrenjanin, Serbia and the Serbian factory is slated to open in 2025.

Linglong woud be investing an amount close to USD 1.2 billion in both these projects.

Linglong, which is currently the 17^th largest tire manufacturer in the world, based on sales revenue to the tune of USD 2.32 billion in 2018 also divulged its 2020-30 strategic plan. According to this plan, it expects sales to grow to 160 million units, or USD 11.5 billion, thus helping it to join the ranks of the top five tire manufacturers in the world. By 2025, the company expects its sales to be split 50/50 between domestic and  overseas markets.

The company has revised its original growth strategy of “5 domestic plants + 3 overseas plants” to “6+6″—six plants in China and six internationally by 2030.

The Changchun Automobile Economic & Technological Development Zone in which Linglong’s new plant will be located is home of several leading automakers such as FAW-Volkswagen and FAW Jiefang.

The plant is scheduled to come on stream in phases:

• Phase One: 1.2 million truck and bus tires
• Phase Two: 400,000 truck and bus tires and 6 million passenger car tires
• Phase Three: 400,000 truck and bus tires, 6 million passenger car tires and 200,000 retread truck and bus tires

Linglong projects that once the plant is fully operational, it would generate about USD 50 million annual net profit on USD 622 million revenue.