Recently, Sailun Tire (601058.SH) announced important news that it plans to invest in the construction of the “Egyptian Tire Production Capacity Improvement Project” through its Egyptian subsidiary. This move has attracted market attention.
It is understood that the total investment in the project is as high as US$1,141.31 million (approximately RMB 8.152 billion, calculated based on the exchange rate of the day: 1 US dollar = 7.143 RMB).
After the completion of this project, it will bring about a significant increase in production capacity.
Specifically, the annual production capacity of 27 million semi-steel radial tires, 1.65 million all-steel radial tires and 20,000 tons of off-highway tires will be added.
This will not only meet the market demand for different types of tires, but will also further strengthen Sailun Tire’s global layout.
The announcement shows that the board of directors reviewed and approved three important proposals, namely the “Proposal on the Foreign Investment of Wholly-Owned Subsidiaries”, the “Proposal on the Capital Increase in Related Subsidiaries” and the “Proposal on Convening the First Extraordinary Shareholders Meeting in 2026”, and all were passed with 7 votes in favor, 0 votes against, and 0 abstentions.
However, the above-mentioned investment and capital increase proposals still need to be submitted to the company’s shareholders’ meeting for review.
According to the plan, the production capacity improvement project will be jointly implemented by the company’s wholly-owned subsidiary Shams El Sherouk Tire Co., Ltd. (hereinafter referred to as “Shams El Sherouk”) and the newly established wholly-owned subsidiary Senro Tire Co., Ltd. (hereinafter referred to as “Senro Tire”).
Among them, Shams El Sherouk is responsible for the construction of the annual production capacity of 9 million semi-steel radial tires, and the remaining 27 million semi-steel tires, 1.65 million all-steel tires and 20,000 tons of off-highway tire production capacity are constructed by Senro Tire.
The investment composition of the project is as follows: construction investment is US$1.09002 million, accounting for 95.49%; initial working capital is US$42.1 million, accounting for 3.69%; interest during the construction period is US$9.19 million, accounting for 0.81%; total project investment is US$1.14131 million, accounting for 100%.
In order to ensure the smooth implementation of the project, the company has simultaneously planned a capital increase plan totaling no more than US$691.11 million. The funds will eventually be injected into the project implementation entity through a multi-layer subsidiary structure.
The specific capital increase path is relatively complex, involving multiple entities such as Sailun Tire, Sailun Hong Kong, Sailun Singapore, and Sailun Europe.
Sailun Tire stated that this investment is an important decision based on global industry development trends and the company’s international development strategy.
The purpose is to better match and meet customer needs in the global market and enhance the company’s comprehensive strength and global core competitiveness.
In recent years, Sailun Tire has continued to promote its internationalization strategy and has established production bases in Vietnam, Cambodia and other places. This Egyptian production capacity improvement project will further improve its global production layout and enhance its radiation capabilities in the European, African and Middle Eastern markets.
According to the announcement, the company will hold the first extraordinary shareholders’ meeting in 2026 in the near future to review the above-mentioned investment and capital increase matters.
Market analysts pointed out that the implementation of this project will significantly increase Sailun Tire’s global production capacity and optimize its product structure, which will help the company gain a larger share in the global tire market competition.
