Xi attends signing ceremony of Guizhou Tyre’s new tire plant in Vietnam

Chinese president Xi Jinping met Nguyen Phu Trong, General Secretary of the Communist Party of Vietnam (CPV) Central Committee, on Nov. 12 in Hanoi.

After the meeting, the two leaders attended the signing ceremony of Guizhou Tyre’s 1.2-million all-steel radial tire investment project in Vietnam.

With an overall investment of 400 million U.S. dollars, the project is expected to be completed in 12 months and the annual capacity will be 1.2 million all-steel radial tires.

The profitability of Guizhou Tyre in the first three quarters was poor.

The company attributed the results to two factors:

First, tire prices grew slower than raw material prices and the gross profit margin declined;

Second, the export market was affected by the anti-dumping and anti-subsidy measures taken by the U.S. market, and the sales volume dropped on a yearly basis.

The tire producer said that establishing the Vietnam base is not only in accordance with China’s Belt and Road Initiative, but also lowers logistics costs, shortens supply circle and increases operation efficiency by getting the raw material supply market closer to the export market.

In addition, the new plant helps Guizhou Tyre effectively avoid the impacts from the anti-dumping and anti-subsidy tariffs in the international market, improve the producer’s overseas market operation, and improve its international competitiveness.