China’s JGST to build US$300m tyre plant in Thailand

Chinese tyre maker Jiangsu General Science Technology Company (JGST) plans to build a US$300m tyre plant in Thailand's Rayong Industrial Zone.The company, headquartered in Wuxi, China, had originally considered Cambodia but later chose Thailand because of its better transportation infrastructure, strong supply chain and good availability of raw materials.

It will also benefit from Thai government incentives, including exemption from corporate income tax for the first eight years of operation.

Other global tyre manufacturers with plants in Thailand include Michelin, Goodyear Tire & Rubber, Bridgestone, Continental and Shandong Linglong Tire Company.

JGST said the plant would take 15 months to build and have an ultimate annual production capacity of 6m passenger vehicle and 1m truck and bus tyres per year.

It is scheduled to reach full production after three years of operation when it is projected to generate annual revenues of US$320m and net profits of US$36m. It will supply global markets, including the US.

The investment is seen in part as a hedge against increasing international trade barriers with trade tensions between China and the US continuing to rise and also because of the broadly applied, anti dumping policies levied against many Chinese made products, including tyres.

Offshoring production can help companies such as JGST bypass many of these restrictions.

The company is also spending an additional US$230m to expand truck and bus tyre production capacity in Wuxi by 1m units annually.