Chinese Company Invests US$200m to Build New Tyre Plant in Kratie

3 March 2023
Local News
5907 Views

Qingdao Double Star Group, a Chinese car tyre manufacturer, has announced plans to invest US$210 million in a new greenfield tyre manufacturing plant in Cambodia. The company will partner with local mining company UBE Development Co. Ltd. to establish a subsidiary, Double Star (Cambodia) Tire Co. Ltd., for the investment.

The new plant will be located in Kratie province’s special economic zone and is expected to be completed within 15 months. Once fully operational, the facility is expected to generate average annual sales of RMB 2.8 billion and a net profit of about RMB 550 million.

“The investment is part of Qingdao Double Star Group’s localisation strategy and aims to “actively respond” to international trade barriers in view of high tariffs on Chinese products,” according to the company.

This move follows two other Chinese companies, Sailun and General Intelligence, who have invested in tyre factories in Cambodia. Sailun invested US$350 million in one special economic zone in Svay Riang province under a 50-hectare area, and production has been operating since November 2021. Meanwhile, General Intelligence has invested US$300 million and is building a factory in the Sihanoukville Special Economic Zone.

The announcement is welcome news for Cambodia’s economy, particularly the industrial sector, which has retained positive signs of growth. In 2022, 1,982 operating manufacturing factories produced a total output of $15,834 million, up 83% from 2021, according to HE Cham Prasidh, Senior Minister and Minister of Industry, Science, Technology and Innovation. The sector also created over one million jobs, an increase of 4%, and had a total investment of US$16.69 billion, an increase of nearly 21%. The new tyre plant investment by Qingdao Double Star Group is expected to further boost the industrial sector and create more jobs in Cambodia.

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