Egyptian-Chinese JV to set up USD 360 mn tire factory in the SCZone

Chinese firms eye tire factory in Egypt: An unnamed Chinese company is looking to set up a USD 360 mn tire factory in the Suez Canal Economic Zone (SCZone) in partnership with the state-owned Arab Organization for Industrialization (AOI), Asharq Business reported last week, citing what it says are two informed sources.

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Who will do what? The Chinese company will own 52% stake of the JV and will be responsible for securing financing for the project, while AOI will provide the land for the factory and will own the remaining stake.

The project is expected to begin production by the end of 2025, and will produce some 6 mn tires annually in its first phase, with plans to increase production to 12 mn tires in the future.

This isn’t the first time we heard about a Chinese company interested in local tire production: The Military Production Authority signed a contract with China’s Poly Group in December 2019 to jointly establish a tire production facility with an annual capacity of 3 mn tires, but we haven’t heard much on the project since then. We also heard that the China National Tire & Rubber Corporation was in talks with the military production and public enterprise ministers all the way back in 2018 to discuss setting up a tire factory, but likewise didn’t hear anything more about the project later down the line.

There’s also other sizable tire factories in the pipeline: Rolling Plus Chemical Industries signed a contract last year to establish a EUR 1 bn tire factory to produce some 7 mn tires. The government is also reportedly working with the private sector to revive and develop state-owned tire manufacturer Trenco with estimated investments of USD 160 mn.