With Europe, America factories planned, ZC Rubber prepares for IPO

China’s biggest tyre maker wants to grow even larger and expand its manufacturing footprint to Europe and North America, producing tyres that approach the premium market. To finance these ambitious plans, ZC Rubber will debut on the Shanghai Stock Exchange in the not-too-distant future.

When we spoke with Richard Li during an event for European Westlake and Goodride partners at the Nürburgring circuit this week, ZC Rubber’s marketing director of international business confirmed that the tyre maker’s initial public offering may take place as early as this year. “We’ve submitted the application and they (the Shanghai Stock Exchange) have just checked our data. We hope that we can finish the process this year, but this will depend on the process of government registration as well as auditing.”

The exact timing of the ZC Rubber IPO is out of the company’s hands – Richard Li comments that “so many firms want to be publicly listed these days” and this may delay the process – but he emphasises that the IPO will be a significant event. Without sharing an expectation of how much the IPO could raise for ZC Rubber, Li comments that “we hope that our total value should be the biggest for the tyre industry in China.” The current record is held by Triangle Tyre, whose IPO in 2016 amounted to RMB 4.414 billion.

Richard Li, ZC Rubber’s marketing director of international business, shares the company’s aim for a place in the global top 5 (Photo: Tyrepress / Stephen Goodchild)

Top 5 ambitions

A turnover of RMB 32 billion (£3.4 billion) for 2022 places ZC Rubber firmly in the position of being China’s largest tyre maker, according to our latest ranking of the World’s Leading Tyre Makers. We rank the company as the ninth largest tyre firm in the world, but ZC Rubber has its eyes on the top five.

This, states Richard Li, is the tyre maker’s “target for the coming decade.” He emphasises that this will be a “great challenge” for ZC Rubber as current number five Sumitomo Rubber Industries generated turnover of 1,098.7 billion yen (£6.1 billion) last year, 85.5 per cent of this coming from tyres. To secure a top five spot, ZC Rubber has set itself a goal of domestic revenue of US$3.2 billion and international revenue of $4.8 billion by the mid-2030s; by 2021 the company had already achieved 70 per cent of its target for the Chinese market and 42 per cent worldwide. Going forwards, Li says ZC Rubber intends to meet these targets with “more tyres and more expensive tyres” – including products that “touch the premium market” in the “coming ten years.”

Plant feasibility studies

ZC Rubber aims to produce these tyres in its factories in China and Thailand, as well as in new facilities in North America and Europe. According to Richard Li, ZC Rubber has already conducted feasibility studies in a number of locations.

“We have several teams in different countries to evaluate the production costs as well as the local government policies but have not made a final decision. This will take some time. Li tells us that factors related to the IPO process prevent him from discussing specific sites and a timetable for setting up facilities, but it appears that ZC Rubber will focus on North America first and then Europe.