China's Sailun Group Co Ltd is considering setting up a plant in southeastern Cambodia to produce tyres for passenger vehicles in the Kingdom.
According to a feasibility study revealed in a report published by Tyrepress Media, the tyre-maker is interested in building a facility within Svay Rieng province’s QiLu (Cambodia) Special Economic Zone that is capable of making five million semi-steel radials a year.
Located 4km from the Svay Rieng town centre and operated by Qilu (Cambodia) Economic Co Ltd, the special economic zone has a total planned industrial area of 360ha in two phases of development to house leading industries such as garment manufacturing, food processing, machinery, electronics and light-industrial factories.
The first phase will cover 213ha and second will add 147ha. The project will require an estimated investment of 1.18 billion yuan ($181.4 million).
Svay Rieng deputy provincial governor Ros Pharith welcomed the company’s expression of interest, saying: “The provincial administration supports all foreign investors who invest to create more jobs and income for the people living here [in Svay Rieng].
“We have no objection to [Sailun’s] intention of investing in our town in accordance with the law and the approval of the Council for the Development of Cambodia [CDC],” he said.
Interest by foreign investors in developing the Kingdom’s tyre industry has gained traction in recent years.
It is no surprise as data from the Ministry of Economy and Finance’s General Department of Customs and Excise has shown the tyre industry to be a lucrative business for foreign investors with the Kingdom importing 1,124,210 vehicles worth $1.882 billion in 2019.
Although the considerable investment planned by Sailun marks a significant step towards the development of the domestic tyre industry, it is not the only foreign investor that has set its sights on the market.
The CDC last month approved a final registration certificate for Cart Tire Co Ltd’s $15 million tyre factory in QiLu Bavet Special Economic Zone in Svay Rieng province’s Bavet town.
General Directorate of Rubber director-general Pol Sopha welcomed that project, saying it would absorb a great deal of the Kingdom’s unprocessed rubber, which is mostly exported.
“A tyre factory in the country is wonderful news,” he said. “We’ve been advocating for growth in the rubber industry and have invited investors to capture a slice of the industry pie and process our rubber into various finished types of tyres.
“Cart Tire setting up shop here would not only lead to increased purchases of domestic raw natural rubber, but to greater value-added, to job creation and the reduction of vehicle tyre imports and capital outflows.
“Establishment of the tyre factory in the country will stabilise the domestic price of rubber and curb its reliance on prices in other countries,” Sopha said.