China’s Linglon mulls USD 2 bn tire export hub in Egypt’s Borg El Arab

Chinese tiremaker Shandong Linglong is looking to set up a USD 2 bn tire manufacturing complex in Borg El Arab, company officials said during a meeting with Investment Minister Mohamed Farid. And while no timeline was given for the project or for when the company plans to put pen to paper, company representatives said that they’re looking to secure the required licenses and approvals to move forward with the project.

And while we’re excited about what this means for our auto localization efforts, exports remain the name of the game, with the tiremaker planning to export around 90% of output — namely to the US and the GCC.

To sweeten the pot, the project will be set up under a private freezone model, allowing it to bypass traditional customs hurdles while benefiting from Egypt’s competitive labor and energy costs.

What to expect? The project — which will cover 3 mn sqm — will produce tires for cars and heavy vehicles, alongside key feeder products, including rubber and carbon black.

The USD 2 bn price tag makes it the priciest local tire project in the works (by our math) — dethroning Organi Group and Rolling Plus Chemical Industries’ planned EUR 1 bn tire factory project.

Chinese-Egyptian fusion: The project will be set up in cooperation with Fit & Fix parent company Nile Projects and Trading.

We have another Chinese tiremaker setting up shop here: Late last year, Sailun Group broke ground on its USD 1 bn automotive tire plant in Sokhna. The project is expected to come online this year, producing around 3.6 mn tires annually during phase one.

Progress on the auto localization front is expected to pick up now that the government revamped the Automotive Industry Development Program to slash the initial local component ratio to a highly accessible 20%.