Xingda and Hixih to build joint factory

Recently, Jiangsu Xingda Steel Tyre Cord and Hixih Rubber entered an investment agreement. It is reported that the two parties are preparing to establish a joint venture to build a factory with an annual output of 50,000 tons of steel tyre cord. According to the agreement between the two parties, Xingda will be responsible for all operations and management of the joint venture company. The board of directors of the joint venture company consists of three directors, with the number of directors appointed by Xingda and Hixih being two and one.

The total investment in the joint venture is 600 million yuan (approximately £68 million; €78 million). Of that, Xingda holds 60 per cent of the equity of the joint venture, equivalent to an investment of 360 million yuan. Hixih has 40 per cent of the shares, with an investment of 240 million yuan. It is reported that both Xingda and Hixih will use the property rights of real estate to calculate the investment amount. Xingda will provide production equipment, while Hixih will provide land and factories. Both parties will make up the remaining investment amount through cash injection.

According to the agreement between the two parties, the initial investment of the joint venture is 100 million yuan, with Xingda investing 60 million yuan and Hixih investing 40 million yuan. The remaining 500 million yuan of investment will be carried out later, which may involve converting funds for equipment, land and factories.

According to public information, the newly established steel cord factory is in the “Hixih High-end Rubber New Materials Industrial Park” in Jining, Shandong. If we consider the geographical location alone, Hixih Rubber’s headquarters and multiple tyre factories are in Jining. According to Hixih, the total investment in the new rubber materials industrial park is 10.265 billion yuan (approximately £1.16 billion; €1.33 billion), “focusing on high-end rubber and related new material industry chains”. On September 26, the first phase of the steel cord factory project started. It is the first project of Hixih High-end Rubber New Materials Industrial Park.