China's Hixih to expand car, truck tire capacity

Hixih Rubber Industry Group is planning to add annual capacity for 12 million passenger tires and 2 million truck/bus tires at its Shenzhou Tyre and Tongli Tire Co Ltd. subsidiaries in Jining, Shandong, pending regulatory approval.

The projects are budgeted at $690 million and include the construction of new production areas totaling more than 8 million square feet at the two subsidiary companies.

The car tire expansion at the Shenhzhen Tire facilities represent an investment of $410 million and a physical expansion of 5 million square feet.

According to the project's environmental filing, phase one of the car tire project, comprising half the capacity expansion, is scheduled to come on stream by October 2018; phase two will take 17 months thereafter.

When in full operation, it'll create 2,000 jobs and generate $10 million in annual profits on $110 million in sales.

The truck/bus tire project, budgeted at $280 million, will double the Tongli Tire factory's capacity to 4 million units a year, Hixih said. The company anticipates adding production areas covering 3 million square feet and equipping the expansion with state-of-the-art equipment sourced from leading international suppliers.Hixih Rubber Group photoHixih Rubber Group's manufacturing complex in Jining, Shandong Province.The expanded production should yield annual revenue of roughly $370 million, Hixih said, and generate earnings of $66 million.

The company sells its products under the RoadOne brand.

Last year, Hixih reported $720 million in overall sales. These new capacities are expected to boost that to nearly $1 billion in the coming years, the company said.

The group, founded in 1989 as a producer of conveyor belts and other industrial rubber goods, added tires to its product mix in 2005 when it set up a joint venture with Pirelli & C. S.p.A. called RoadOne Tyre.

The tire company has annual capacities of 2.6 million truck and bus tires, 8 million passenger tires and 3 million motorcycle tires. Most of such capacity is under the group's joint venture with Pirelli.

The new facilities will use Pirelli's technology as well, according to the filing.