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Chinese tire giants signs $300 mln with BOI

The Board of Investment of Sri Lanka yesterday signed an agreement with world-leading Chinese tyre manufacturer, Shandong Haohua Tire Co. Ltd., to set up a project to manufacture tyres for the export market. 

“This significant investment will boost the rubber-based manufacturing industry of the country, while creating new path ways to the export markets,” the BOI said. 

This high profile project has been qualified under the provisions of the ‘Strategic Development Act’ with an envisaged Foreign Direct Investment of $ 300 million. Exports are expected to commence within three years.

The BOI said the rubber sector was one of the five thrust sectors identified by the BOI’s strategy to drive FDI to the country. 

Presently Sri Lanka gains $ 1 billion worth of export earnings through the rubber industry, while the Government has set up a target of $ 2 billion to achieve by 2025. “Establishment of this project will fulfil 30% of the target once operations commence,” the BOI said. 

Shandong will manufacture semi-steel radial tyres and all-steel radial tyres needed for trucks, buses and passenger cars, creating job opportunities for nearly 2,000 people. The inflows of the skills and the technology to the local youth through this investment will be another unique advantage for the country. 

Small and medium scale rubber plantation industry employees will be benefited through this new development. The upcoming manufacturing process will create indirect employment, creating new income opportunities to the livelihood in the area as well.

Shandong will be established on 121 acres of land in the Industrial Park within the Hambantota International Port. The Hambantota International Port Group (HIPG) has offered this land extent to the Chinese giant company as its first-ever Foreign Direct Investment within the Industrial Park. 

In phase one, the company is targeting an annual production of nine million tyres to be shipped in 45,000 containers. It is expected that the Hambantota Port will become more productive with this establishment and thereby generate revenue while achieving the country’s economic goals.

Shandong’s presence in Sri Lanka being a world leader in manufacturing tyres to the world shows the growing attractiveness of Sri Lanka as a destination for investment.

The agreement was signed on behalf of the BOI by Chairman Susantha Ratnayake and on behalf of the company Cao Mingzhang and Xu Jiancun from Hambantota International Port Group. The other dignitaries present were Minister of Ports and Shipping Rohitha Abeygunawardena, State Minister of Aviation and Export Zone Development D.V. Chanaka and State Minister of Company Estate Reforms, Tea and Rubber Estates Related Crops Cultivation and Factories Modernisation and Tea and Rubber Export Promotion Kanaka Herath.

Prime Minister Mahinda Rajapaksa, Minister of Youth and Sports Namal Rajapaksa, Chinese Ambassador to Sri Lanka Qi Zhenhong and Shandong Haohua Chairman Wang Keqiang (from China) joined this occasion via online video conferencing.