In 2026, Fengshen Tire Co., Ltd. will take an important step in overseas markets.
An announcement on May 14 showed that the company plans to invest in a tire capacity expansion and efficiency improvement project in Alexandria, Egypt, through the Hainan Platform and an Egyptian joint venture, with a total investment of up to 2.68 billion yuan.
The project is a new overseas investment project with an estimated construction period of 20 months. It is planned to add an annual production capacity of 1.5 million truck and bus tires, 30,000 engineering radial tires, and 30,000 agricultural radial tires.
The key structure of the investment has been disclosed.
Aeolus Co., Ltd. plans to first invest 840 million yuan to establish Aeolus Tire Hainan Company. After Aeolus Hainan is established, it will introduce investors through capital increase and share expansion, and then jointly establish Aeolus Egypt with Badian Egypt and China Rubber International.
According to the current plan, the registered capital of Fengshen Egypt is planned to be 1.516 billion yuan. Fengshen Hainan plans to invest 1.5 billion yuan and hold 98.93% of the shares; Badian Egypt holds 1%; China Rubber International holds 0.07%.
The project is located in Alexandria and has a ready asset base.
Fengshen plans to make full use of the existing land and some public works of the Badian Egypt factory, purchase the land adjacent to the factory, build a new radial tire production workshop, finished product warehouse, mileage test station, physical and chemical laboratory and supporting public works, renovate and expand the main substation, and add process, testing and power equipment.
This can reduce the difficulty of landing in the early stage.
However, the project is still in the preliminary stages.
Fengshen announced clearly that as of the date of the announcement, Fengshen Hainan and Fengshen Egypt have not yet been established, and the company has not yet signed formal transaction documents with investors, Badian Egypt, and China Rubber International; this related transaction must also be submitted to the company’s shareholders’ meeting for review, and the approval or filing of overseas investments in China must be completed, as well as relevant local procedures in Egypt.
The construction plan, construction cycle, construction scale and investment effects are still subject to adjustment.
Fengshen chose Egypt because of changes in the overseas production capacity layout of Chinese tire companies.
Fengshen’s 2025 annual report shows that the company’s export revenue was 3.4481043 million yuan, accounting for 47.32% of its main business revenue; its overseas business achieved revenue of 3.448 billion yuan throughout the year, a year-on-year increase of 8.89%.
However, Chinese tires exported to the United States face many superimposed tariffs, with comprehensive tax rates as high as 89% – 251%. Direct export channels from China to the United States are basically blocked.
Egypt’s appeal lies in its market radius and trade arrangements.
According to Egypt’s General Administration of Investment and Free Zones, Egypt’s multiple free trade agreements can reach approximately 1.5 billion consumers, including approximately 100 million consumers in Egypt; approximately 8% of global trade passes through the Suez Canal.
Egypt’s trade arrangements include the Greater Arab Free Trade Area, the Common Market for Eastern and Southern Africa, the Agadir Agreement, the Egypt-EU Association Agreement, the Egypt-European Free Trade Association Agreement, the Qualified Industrial Zone Arrangement, the Egypt-Turkey Free Trade Agreement, the Egypt-Mercosur Free Trade Agreement, etc.
This also explains why Chinese tire companies are using Egypt as a regional manufacturing base.
In September 2025, the Suez Canal Economic Zone officially disclosed that Sailun Group held a groundbreaking ceremony for the tire project in the Sukhna Comprehensive Industrial Zone, with a total investment of US$1 billion and planned implementation in three phases. After full production, the annual production capacity is expected to exceed 10 million tires.
Reuters also reported in August 2025 that Egypt and Sailun signed a US$1 billion tire factory agreement, and the first phase of the project is scheduled to be completed in 2026.
For Fengshen, the Egyptian project is about moving production capacity forward.
In the past, overseas business mainly relied on agents, sales subsidiaries and warehousing. The company’s annual report shows that it has nearly 300 overseas agents, its products cover most countries and regions around the world, and it has operated 6 overseas subsidiaries.
Now, the Alexander Project has extended this sales network to the production end, with its key products focusing on truck and bus tires, engineering tires and agricultural tires, corresponding to African demand scenarios such as logistics, infrastructure, mining and agricultural machinery.
The impact on Chinese companies is divided into two levels.
The first level is direct industry chain opportunities.
The establishment of a tire factory requires civil engineering, mechanical and electrical installation, rubber mixing and molding equipment, vulcanization equipment, testing equipment, warehousing and logistics, environmental protection systems, industrial electrical, and spare parts services.
Chinese companies that are already supporting industrial projects in Egypt, North Africa and the Middle East can focus on tracking the establishment of Aeolian Egypt, the signing of formal transaction documents, government approvals and project bidding nodes.
The second level is changes in the competitive landscape.
After Chinese tire companies establish production capacity in Egypt, their delivery radius to surrounding markets in Africa, the Middle East, and Europe will be shortened.
For small and medium-sized tire traders who still rely on China’s local exports, their price and delivery advantages will be weakened; companies with equipment, engineering services, rubber chemical materials, molds, warehousing and local after-sales capabilities will be more likely to follow Chinese tire factories into the Egyptian supply chain.
In the short term, this incident will have limited impact on the daily operations of ordinary Chinese companies, because the project still has to go through shareholders’ meetings, domestic and overseas approvals, the establishment of joint ventures, and the implementation of formal agreements.
The next most worthy of tracking are the two signals, one is whether Fengshen discloses the list of investors and formal agreement, and the other is whether Egypt’s local approval, land, and construction permits are advanced as scheduled.
