Prinx Chengshan suspends Anhui project, looks to Europe

Recently, Prinx Chengshan revealed in its 2022 annual report that it has decided to suspend its Anhui tyre factory project. The tyre maker said that the suspension of investment was due to the domestic and foreign economic situation and the company’s forecast analysis of capacity utilisation. According to the original plan of Prinx Chengshan, the Anhui factory is its second tyre factory in China.

If there is no production base in Anhui, Prinx Chengshan has two production bases in Shandong, China and Thailand. Among them, the second-phase project of the Thailand production base reached production in 2022. The Thailand factory’s design capacity is 2 million all-steel radial tyres and 8 million semi-steel radial tyres annually. In 2022, the capacity utilisation rates of all-steel radial and semi-steel radial tyres in Thailand’s base were 94.4% and 57.1%, respectively.

The expansion project of the Shandong base reached production in the first quarter of 2022, with the capacity to produce 7.4 million all-steel radial tyres and 11.2 million semi-steel radial tyres. During the reporting period, the capacity utilisation rates of the Shandong base were 69% (all-steel radial tyres) and 85.8% (semi-steel radial tyres).

By the end of 2022, the production capacity of Prinx Chengshan’s two production bases has increased to 29.8 million units per year, including 9.4 million all-steel radial tyres, 19.2 million semi-steel radial tyres and 1.2 million bias-ply tyres.

Prinx Chengshan sold about 18.5 million tyres in 2022, basically the same as the previous year. The products sold include 6.7 million all-steel radial tyres, 11.5 million semi-steel radial tyres, and 270,000 bias-ply tyres. Statistics show that Prinx Chengshan relied heavily on overseas markets, and nearly 70% of its products were sold through international distributors.

Tyre maker looks to global markets, especially Europe

In the 2022 annual report, Prinx Chengshan summarised the global market. The company said that in the first half of 2022, demand in overseas markets was strong, and in the second half of the year, demand declined due to the economic recession, especially in the North American market. Shipping costs plummeted rapidly to normal levels in the second quarter of 2022, and global currencies, except the US dollar, depreciated sharply.

When talking about prospects, Prinx Chengshan particularly emphasised the European market. The company stated that it had strengthened its European sales team in 2022 to prepare for the performance growth of the European market in 2023.

In 2022, the sales revenue of Prinx Chengshan was 8.15 billion yuan (about £960 million; €1.09 billion), an increase of 8.2%; the net profit reached 390 million yuan (about £45.9 million; €52.2 million), an increase of 42.5%.