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Chengshan Group invests RMB2 bln setting up Malaysia plant

The Prinx Chengshan Tire (Malaysia) program of Chengshan Group has been approved by the Commercial Bureau of Shandong province.

With an overall investment of 299 million US dollars (about 2.06 billion yuan), the program is expected to be constructed in 15 months and reach designed capacity in three years.

The designed capacity of the program includes 1.2 million all-steel radial tires and 4 million semi-steel radial tires.

Over the past few years, international barriers, represented by the anti-dumping and anti-subsidy probe by the US, increased continuously. On the other hand, domestic costs on land and labor kept climbing. Building plants overseas has become a consensus of many Chinese tire producers.

The Malaysia plant of Qingdao Fulin Group is under construction, while another renowned domestic tire company is considering building a plant in the country.

In addition, domestic tire companies, including Linglong, Sentury, Zhongce, and Sailun Jinyu, have all established tire production bases in Southeast Asia.

Over the past two years, domestic tire companies accelerated their paces in plant building in Southeast Asia.

Some 70% global rubbers are from Southeast Asia, in which the raw material supply is sufficient and inexpensive, and the price is comparatively stable.

Establishing tire production bases in the region helps producers make full use of local inexpensive materials to reduce costs and avoid international trade barriers to gain greater development space.

All these have made Southeast Asia attractive to Chinese tire producers.