Car, truck & OTR tyres – Sailun to build plant in Indonesia

Sailun Group has announced plans to set up a factory in Indonesia capable of producing 3 million semi-steel radial tyres, 600,000 all-steel radials and 37,000 tonnes of OTR tyres annually. The company intends to invest US$251.44 million in the project, including $204.29 million to build the plant in Demak, Central Java.

Wholly owned Sailun Group subsidiary, Sailun International Holding, is managing the “Indonesia Project with Annual Output of 3.6 Million Radial Tires and 37,000 Tons of OTR Tires” and set up the facility within 21 months. This entity’s subsidiary, named in company documentation as PT Sailun Manufacturing Indinesia, will operate the completed plant. The factory will employ up to 807 people on the project, including up to 787 in production-related roles.

Half the $251.44 million investment will come from Sailun’s own funds and the remainder borrowed from financial institutions. Sailun Group anticipates that the project will achieve an average annual operating income of $270.21 million and an average annual net profit of US$66.89 million. The company reports that results of financial analysis and evaluation show an expected net profit margin of 24.76 per cent for the project, with a project payback period of 4.88 years.