On April 21, Sailun Tire (601058) announced that the company’s wholly-owned subsidiary Shams El Sherouk plans to invest in the construction of an expansion project for Egypt’s annual production of 7.05 million radial tires, with a total investment of US$285 million. The company will implement project construction funds through a step-by-step capital increase of multi-level wholly-owned subsidiaries, further improve the global production capacity layout, and enhance overseas market supply capabilities.
According to the information disclosed in the announcement, this Egyptian expansion project is located in Ataka, Suez Province, Egypt –
The construction content of the TEDA Industrial Zone in the Suez Canal Special Economic Zone in Suhana is to produce 6 million semi-steel radial tires and 1.05 million all-steel radial tires annually. The project construction period is 18 months.
The total project investment is US$285 million.
In order to ensure the funding needs of the project, Sailun Tire plans to increase its capital investment in Sailun Hong Kong by no more than US$285 million, which will be gradually increased through subsidiaries such as Sailun Singapore and Sailun Europe, and finally injected into the entity implementing the Egyptian project. The total capital increase will be consistent with the total investment of the project.
Sailun Tire stated that after the completion of this project, it is expected to achieve an average annual operating income of US$368 million and an average annual net profit of US$61.5 million, further enhancing the company’s economic benefits.
After the project is put into production, it will be easier for the company to obtain overseas market opportunities and meet the continuously growing overseas market demand. By actively responding to the needs of downstream customers, the company will continue to enhance its comprehensive attractiveness to downstream customers, thereby accelerating the increase in the production and sales of the company’s products.
After the completion of the project construction, Shams El
Sherouk will have an annual production capacity of 9 million semi-steel radial tires and 1.65 million all-steel radial tires, which will help enhance the company’s ability to deal with international trade barriers and form a global production capacity matrix with China, Vietnam, Cambodia, Mexico, and Indonesia, which is of great significance to improving corporate competitiveness and expanding market share.
Sailun Tire is one of the earliest tire companies in China to deploy overseas production capacity. Previously, there were tire production capacity projects under construction at the Egyptian base. After this expansion is completed, the production capacity scale of the Egyptian base will be further increased, which is in line with the company’s global production capacity layout plan.
Sailun Tire continues to promote the construction of overseas production capacity, circumvent international trade barriers through localized production, and expand overseas market share. This expansion of the Egyptian project is an important implementation measure of the company’s globalization strategy.
Industry data shows that the global tire market will operate smoothly in 2026, and industry development will show distinctive characteristics.
On the demand side, global demand for original equipment tires declined year-on-year in the first quarter of 2026. The replacement tire market demand was basically flat. The growth rate of demand in the Chinese market has slowed down. The demand for original equipment tires in Europe and North America is on a downward trend. The overall demand for truck tire replacement is stable.
On the supply side, international trade barriers continue to affect the industry structure. Overseas production capacity layout has become the core path for domestic leading tire companies to avoid trade risks and expand international markets. Egypt, Southeast Asia, Central and Eastern Europe and other regions have become key choices for domestic companies to build overseas factories.
On the cost side, raw materials account for more than 70% of tire production costs. Price fluctuations of core raw materials such as natural rubber, synthetic rubber, and carbon black have an impact on industry profits. Since 2026, the price of natural rubber has increased due to supply-side factors, and corporate cost control pressure has increased.
In terms of industry structure, domestic tire companies continue to increase their global market share, and leading companies are gradually increasing their competitiveness in the international market by virtue of their production capacity layout and product quality advantages.
Relevant research reports from brokerage firms believe that raw material cost disturbances in the tire industry usually have a pulse-type impact with a relatively limited duration. The growth of global car ownership supports the steady increase in demand for replacement tires. The global market share of domestic leading tire companies continues to penetrate. Changes in trade policies in Europe, the United States and other regions have accelerated industry clearing. Leading companies with mature overseas production capacity will seize the market share of tailing companies. The performance elasticity of leading companies is significant. The progress of overseas production capacity is the core tracking indicator.
In addition, pessimism in core variables such as trade policy, raw material prices, shipping rates and exchange rates has been fully released, and the industry has the foundation for profit restoration.
