New Doublestar factory in Cambodia

On 20 February 2023, the board of directors of Doublestar reviewed and approved the proposal to build a factory in Cambodia. The tyre manufacturer reportedly plans to establish a joint venture with UBE Development Co. Ltd. in order to complete the plans.

The total investment of the Cambodian factory is 1.44 billion yuan (about £170 million; €200 million), and the planned annual production capacity is 8.5 million radial tyres, including 7 million semi-steel radial tyres (which generally means car tyres) and 1.5 million all-steel radial tyres (a term that general refers to truck and bus tyres).

According to forecasts, Cambodian project will be built in 15 months. After completion, the manufacturing base is expected to realise annual revenue of 2.76 billion yuan (about £330 million; €380 million) and an annual average net profit of 550 million yuan (approximately £67 million; €75 million).

The reason given by Doublestar for establishing the Cambodian factory is to implement its localisation strategy and accelerate the development of the company’s international market presence. Especially in the context of high tariffs on the export of Chinese tyre products, the Cambodian factory can actively help Doublestar deal with international trade barriers and enhance the tyre manufacturer’s global competitiveness.

Joint venture partners

UBE Development, the partner of Doublestar Cambodia Factory, is a Cambodian subsidiary of Zhongqi Holding Group, responsible for constructing the Kratie Provincial Special Economic Zone in Cambodia. And Doublestar’s Cambodian tyre factory will be built in the special economic zone. According to Doublestar’s disclosure, the tyremaker will hold 80 per cent of the equity of the joint venture company and will provide equipment in addition to currency. UBE Development has 20 per cent of the equity, its capital contribution comprises of land use rights and part of the currency.

Both Jiangsu General and Sailun have announced significant investments in tyre production capacity in Cambodia in recent years.