Sailun Tire has made new moves in its global layout.
On June 17, Sailun Tire (601058.SH) announced that the company plans to invest in the construction of the “Egyptian Tire Production Capacity Improvement Project” with a total investment amount of US$1.14131 million (equivalent to approximately RMB 7.807 billion), and will provide financial support for the project through capital increases in multi-tier subsidiaries.
This is the company’s third major investment in the Egyptian market following August 2025 and April 2026, aiming to further improve its global production capacity layout.
The announcement shows that the project has rich construction content, including an annual production of 27 million semi-steel radial tires, 1.65 million all-steel radial tires and 20,000 tons of off-highway tires. It will be implemented by the company’s two Egyptian subsidiaries respectively.
Among them, Shams El Sherouk is responsible for building the part with an annual output of 9 million semi-steel radial tires, and the new project entity Senro Tire (to be established) will assume the remaining 18 million semi-steel tires, 1.65 million all-steel tires and 20,000 tons of off-highway tire production capacity.
The composition of the total investment of the project is clear.
The construction investment is US$1.09002 million, the initial working capital is US$42.1 million, and the interest during the construction period is US$9.19 million, totaling US$1.14131 million.
In order to meet the project funding needs, Sailun Tire has designed a step-by-step capital increase path, with a total capital increase of US$691 million, involving multi-layer subsidiaries such as Sailun Hong Kong, Sailun Singapore, and Sailun Europe.
According to the project plan, the Shams El Sherouk project has a total investment of US$227.09 million, a construction period of 15 months, and an estimated investment return rate of 18.46%; Senro
The Tire project has a total investment of US$914.22 million, a construction period of 24 months, and an estimated investment return rate of 14.03%.
Both projects adopt the financing model of “self-raised funds + bank loans”, with self-raised funds accounting for 33.5% and 60% respectively.
Sailun Tire said that Egypt, as a transportation hub in Asia, Africa and Europe, has unique logistics advantages.
After the project is completed, it will form a synergistic linkage with the company’s existing overseas production bases, effectively improve regional order response and delivery capabilities, and avoid international trade barriers.
After the project reaches full production, it is expected to increase average annual operating income by US$1,160.8 million and average annual net profit by US$170.18 million.
It is worth noting that this investment still needs to go through a number of approval procedures, including review and approval by the company’s shareholders’ meeting, as well as approval or filing by the relevant competent authorities in China and Egypt.
The company also reminded that the project has risk factors such as changes in the market environment, delays or failures in the approval process, and lower than expected economic benefits.
It is understood that in the past 12 months, Sailun Tire has invested a total of US$577 million in Egypt. With this investment, the company’s total investment in Egypt will exceed US$1.7 billion. After completion, it will have an annual production capacity of 36 million semi-steel radial tires, 3.3 million all-steel radial tires and 20,000 tons of off-highway tires, becoming one of the company’s most important overseas production bases.
This investment is an important part of Sailun Tire’s globalization strategy. After the project is completed, the company will form a global production capacity matrix covering China, Vietnam, Cambodia, Mexico, Indonesia and Egypt, further enhancing the company’s comprehensive competitiveness and risk resistance.
