Leading Chinese tire manufacturer Shandong Linglong has announced that it has commenced the construction of a tire production plant in the Zrenjanin Free Trade Zone, Serbia. The plant in northern Serbia is expected to require an investment outlay of 800 million euros and will have a production capacity of 13 million tires on an annual basis. It is expected to create more than 1,200 jobs over the long term, according to Serbian president Aleksander Vucic. Linglong is the third largest tire manufacturer in China and has attained annual sales exceeding USD 2 billion. Linglong will set up a Serbian company, Shandong Linglong Tire Co. Ltd. Overseas (Serbia) to oversee the construction of the plant.
The plant is expected to become operational from the end of 2021 and will be scaled up to reach its full capacity by 2025. The plant will be built in three stages over six years and will be Linglong’s second factory located overseas and its sixth production facility. The company’s first overseas plant is its factory in Rayong, Thailand which was opened in 2014.
The Serbian president said that the construction of Linglong’s factory will send out a positive message to all investors including Volkswagen, which is currently scouting for a site in one of the Central and Eastern European countries to set up a new production facility.
At its full capacity, the plant will produce 12 million passenger car tires, 1.6 million truck/bus tires and 20,000 off-the-road tires.
Linglong had been looking for a site for its second overseas plant from early 2016, when the company’s Chairman Wang Feng had announced the company’s “3+3” strategy of development, with three plants in China and three internationally. This plan has now been modified into a “5+3” strategy, and the company recently broke ground on its fourth plant in China factory, an USD 875 million project in Hubei Province which will have a capacity for 12 million passenger tires, 2.4 million truck/bus tires and 60,000 OTR tires.
Linglong said it opted for the site in Serbia after considering a number of sites in other Eastern European states, including Poland, Czech Republic, Slovakia and Hungary due to Serbia’s “low labor and energy costs.”
Linglong thus becomes the fourth tire manufacturer to set up a factory in Serbia. The three other companies to have a plant there are Cooper Tire & Rubber Co. (in Krusevac); Group Michelin (Pirot); and Trelleborg Wheel Systems (Ruma).
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