Shandong Jiacheng Rubber's boss skips town

As the approaching of the traditional Chinese New Year, two significant news on the tire market in Shandong province spread over the industry.

One goes that three more tire companies in Dongying confronts bankruptcy due to cash flow problems; the other is that the boss of Jiacheng Rubber Industrial, the largest tire company in Zaozhuang, skipped town and the company was to close down.

Jiacheng Rubber is a private company producing rickshaw tires, motorcycle tires and electrical vehicle tires. Its website shows that it products tires of more than 100 patterns with annual output of 15 million sets selling to South Asia, Africa, East Europe and America.

The hearsay goes that the company applied for loans, the lending was granted recently and the board chairman Ren Bixiang skipped town with the money. Some said Ren borrowed money from loan sharks and was unable to pay back.

Rough estimation shows that Jiacheng Rubber’s external debt was more than 200 million yuan at least and the warrantors of the company included a number of local firms in Zaozhuang from rubber, chemical, textile, medical, building materials, to logistics sectors.

Jiacheng Rubber invested 272 million yuan in May 2014 in a rubber powder program with trial capacity of 80,000 tonnes.

（Ceremony of 80,000 tons/year of rubber powder program)

As China’s largest tire producing province, Shandong has a significant position in the tire industry. Under present circumstance when the economic environment and tire market moving down, the status of tire companies in Shandong is especially noteworthy.

The tire industry holds that 2016 will be a sensitive year, cash flow problem confronted some tire companies may lead to knock on effect.