Xu Guangcheng, quality director of Pulin Chengshan (Shandong) Tire Limited Company, has lately visited Malaysia for preparation work of building plants in the Southeast Asian country.
Xu said his company plans to build a new production base in order to guarantee a sufficient supply and deal with the changes in international trade.
China is one of the major trade partners of the United States in terms of the tire industry. Dongying, a city in Shandong province, accounts for about one quarter of China’s tire exports.
In 2015, Dongying saw its tire exports to the U.S. slump 53 percent after the U.S. government launched anti-dumping and anti-subsidy investigations on Chinese tires, according to Xu Qijie, head of the Commerce Bureau of Dongying city.
Building overseas plants is a way for survival, said the general manager of a tire maker in Dongying city.
Qingdao Sentury, which mainly produces semi-steel tires, plans to build a plant in the U.S. in 2017. The new plant is designed with an annual capacity of 12 million pieces of tires, said Sentury chief engineer Zhang Weiwei.
In the past six years, Sailun Jinyu has built rubber processing factory and tire making factory in Thailand and Vietnam, via joint ventures or direct investments.
The Southeast Asia has become the top destination for Chinese tire makers to build overseas plants as the region is the largest origin of natural rubber, said Sun Huabei, a chief of Sailun Jinyu.
Also, the electricity price is cheaper in the Southeast Asia, said Xu Guangcheng.
Other advantages of building factories in the Southeast Asia include the exemption of import tax, cheaper labor force and preferential policies in factory buildings and infrastructure facilities.
