Linglong selects Serbia for US$994 tire factory

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Shandong Linglong, China’s third-largest tire maker with annual sales of more than US$2bn, has selected a site in northern Serbia for a US$994m consumer/commercial tire plant. The plant, to be built in three phases over six years, will be Linglong’s second overseas factory and sixth overall. Its first overseas plant opened in Rayong, Thailand, in 2014.

In a filing made on August 20 with the Shanghai Stock Exchange, Linglong said it chose the site, in the Zrenjanin Free Trade Zone, because of the region’s “cost advantage”. The investment and the establishment of a Serbian entity – Shandong Linglong Tire Co. Overseas (Serbia) – requires the approval of the Chinese National Development and Reform Commission.

Linglong expects construction work on the 4,200,000ft² (390,180m²) plant to start in April 2019. The project will be completed in three phases, and at full capacity can produce 13.6 million high-performance radial tires per year – 12 million passenger, 1.6 million truck/bus and 20,000 off-the-road tires. Full completion of the three phases is set for March 2025.

The Chinese company said it studied a number of sites in other Eastern European countries, including Poland, Czech Republic, Slovakia and Hungary before opting for Serbia due to its “low labor and energy costs”.

Zrenjanin, a city of about 75,000 inhabitants, is located in the province of Vojvodina, roughly 50 miles (80km) north of Belgrade and situated on a tributary of the Danube River. The Zrenjanin Free Trade Zone covers an area of 98ha (242 acres).

Linglong will become the fourth tire company with a factory in Serbia, following facilities built by Cooper Tire & Rubber (Krusevac); Michelin (Pirot); and Trelleborg Wheel Systems (Ruma).

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