Yanchang pay attention to European assets

First ChemChina sent shockwaves through the tyre market by successfully purchasing Pirelli in 2015. This year another Chinese firm – this time tyremaker Qingdao Doublestar – made waves by offering an US$830 million bid for 42 per cent Kumho Tire in mid-March. The obvious question is what is the next tyre-related investment to come out of China?

In 2014 Yanchang Petroleum International Ltd., the Hong Kong-listed subsidiary of Shaanxi Yanchang Petroleum, which is a leading Chinese petro-chemical firm and a Fortune 500 company bought Canadian energy firm Novus Energy for $230-million. The deal was the second largest trade between the Chinese oil sector and Canadian assets.

The point is that Yanchang Petroleum also owns Yanchang Rubber, which has a large, modern tyre production base within its purview – not to mention ambitious growth plans and significant financial backing. The tyre operation trades under the Duraturn brand name in key international markets within Europe and North America. Yanchang Rubber is keen to point out that its UK team will work closely with their Chinese parent company in order to offer more opportunities.

Chinese investment focus turns towards tyre sector

Tyres & Accessories understands that, with tyres continuing to be a major focus in Yanchang’s development, the acquisition of a well-known, brand-named, EU-based tyre manufacturing operation running in a specialist sector could be on the horizon. So far the firm’s first attempt to close such a purchase appears to have stalled on take-off, but this has by no means dampened executives’ sky-high ambitions. Indeed, the word is that the firm remains determined to sell “high quality products” to the European markets one way or another.

Yanchang Petroleum and Yanchang Rubber are headquartered in the city Xi’an in the north-western Chinese province of Shaanxi, the home to the world-famous terracotta army site of historical interest. The capital city of first Chinese dynasty (est. 210BC) – and the birthplace of China’s first oil company (Yanchang Petroleum was established in 1905) – it was the World War 2 headquarters of the Chinese communist-led army and the hometown of President Xi Jinping.

Xi’an’s modernization has accelerated during the opening decades of the 21st century, specifically with a focused plan of being a major aerospace centre. In November 2006, the city of Xi’an and the China Aerospace Science and Technology Corporation established Xi’an Aerospace Science and Technology Industrial Base. This zone focuses on the development of the civil space industry, including equipment manufacturing, software and service outsourcing, new materials and solar technology. In 2008 the Xi’an National Civil Aerospace Industrial Base was added. This zone aims to be China’s National Civil Aerospace Industrial area and covers 23 square kilometres. As a result Xi’an is now home to well-known global aerospace names such as Boeing as well as significant sized domestic operations.