Guangzhou Vanlead Group is to build a US$1bn plant in Orangeburg country, South Carolina.
The project will involve two phases – the first focusing on production of passenger car rubber and the second on truck tires. Phase one will cost approximately US$600m and is expected to create around 1,200 jobs, with construction scheduled to begin in early 2018. Upon completion, phase one of the factory will have an annual capacity of six million tires.
“In the fiercely competitive tire market, only prestigious brands are able to develop. A brand can be enhanced only in a high-end market,” said Fu Shoujie, chairman of Vanlead.
Although labor and construction costs in the USA are higher, land, electricity and gas are cheaper, leading to lower company expenditure overall when compared with production costs in China.
“With this plant in the USA, Vanlead will be able to get closer to its consumers, better understand market demand and enhance its product quality,” added Xu Wenying, secretary general of the China Rubber Industry Association.
“The US factory can also help safeguard the company from high anti-dumping duties, which have been levied on Chinese tire companies in recent years.
“For Chinese tire makers, severe competition in the domestic market has created a need to invest overseas. That has become a trend. A number of projects have come up or are coming up in some Southeast Asian countries.”
The group also plans to set up a research center in Europe and a joint research facility in Ohio.
June 14, 2017