Hangzhou Zhongce confirms Thai factory reports

Leading Chinese tyre manufacturer Hangzhou Zhongce Rubber has confirmed that it is planning to build a tyre factory in the vicinity of Bangkok, Thailand. Speaking to Tyres & Accessories, the executive responsible for the company’s Westlake brand Mr Ge, confirmed that the company had signed a contract with the Thai government to purchase land in the Bangkok development zone.

Work on the first foreign venture for the Chinese company that already runs nine plants in its native Hangzhou is set to commence within the next year. When the first phase of construction is complete the facility is expected to produce 500,000 passenger car radials a year and 100,000 truck and bus tyres annually. Executives declined to give details of the plant’s total intended capacity, explaining that several variables determine the total target size.

Its seems that one motivation for construction of the new plant is it’s proximity to natural rubber sources, the costs of which has put significant pressure on all tyre manufacturers in the last year or so. Earlier reports that the project is being run as a joint venture with Thai Hua Rubber were not confirmed by the company representatives T&A spoke to, but if correct they would seem to support suggestions that this was a key consideration. Bangkok based newspaper The Nation’s 5 billion baht (₤102.7 million) price tag also remains unconfirmed. That report suggested Hangzhou Zhongce holds an 85 per cent share in the joint venture, with the remainder belonging to Thai Hua.

Another potential motivation to build in Thailand is because currently all of Hangzhou Zhongce’s passenger car tyre production remains subject to US import tariffs. With company executives telling T&A that the US is the firm’s largest export market and that demand for its products has remained strong in spite of stateside price increases enforced by the tariffs, this could also explain why Hangzhou Zhongce opted for factory in Thailand. Nevertheless managers said that the plant will export tyres around the world and not just to the US market.