Federal signs off-take deal with Vietnam tyre factory

On 24 February, Federal signed an off-take agreement with Vietnam XT Tyre. According to the agreement between the two parties, XT Tyre will start to produce tyres for Federal in 2023 by Federal’s orders and production specifications. Federal did not disclose the details of the cooperation with XT Tyre, including the specifications and production capacity involved in the making the agreed products and the specific timetable for the collaboration between the two parties.

Not long ago, Federal announced that its Taiwan Guanyin factory temporarily suspended production. The United States imposed high anti-dumping and anti-subsidy tariffs on tyre products made in Taiwan, which seriously affected Federal’s profits. Following the suspension of production at the Guanyin factory, Federal no longer produces tyres at its two plants in Taiwan. Local media declared that the tyre company’s future orders might be handed over to a Vietnamese factory for production.

It is worth noting that the Federal did not reveal the details of XT Tyre. Kumho, Guizhou Tyre, Sailun, Yokohama and some other tyre manufacturers have factories in Vietnam. However, XT Tyre is a mystery, with few reports about this tyre factory. If XT Tyre’s scale is small, can its tyre products meet Federal order demands? At the same time, Federal may need to transfer equipment and technology to ensure that XT Tyre can produce the required tyres.