Sunday, June 23, 2024

Chinese company ZC Rubber to invest nearly US $600M in Coahuila

Coahuila Gov. Manolo Jiménez’s official trip to China has paid dividends as the Asian nation’s leading tire-maker plans to invest US $590 million in the northern state, Jiménez announced this week.

It will be the second Chinese tire company to invest in Coahuila this year, following Yokohama Rubber which started construction on a factory last month.

Jiménez, back in Coahuila on Friday after his nine-day visit to China that included a visit to the 2024 Beijing Auto Show, told reporters five additional Chinese companies were prepared to invest an additional US $300 million in the state.

The newspaper Zocalo reported that the unnamed investors included several companies in the autoparts industry, a lithium battery recycling entity, as well as an aerospace parts and household appliance manufacturer.

The governor issued a statement on April 30 from Shanghai announcing the new ZC Rubber investment:

“Along with our team at Pro Coahuila and the president of ZC Rubber, we can formally announce the news that this great Asian company will invest 10.95 billion pesos in Coahuila which will serve to generate thousands of jobs.”

Two workers carry a car tire
Internal documents show the firm may use the promised funds to build a new tire factory in Saltillo. (ZC Rubber/Facebook)

Pro Coahuila is the state government’s new Office of Economic and Tourism Promotion, established by Jiménez just over two months after he took office on Dec. 1, 2023.

The governor offered no details about ZC Rubber’s investment — i.e., the eventual location of the factory — but did say talks with the president of the Chinese tire-maker, Jin Rong Shen, and company vice president Hao Yu Shen were begun during his September tour of China while governor-elect.

The website Cluster Industrial published details of an internal ZC Rubber document dated Feb. 9, that indicated the tire-maker hopes to build its plant in Saltillo, the state capital, just 250 kilometers (155 miles) from the U.S. border. The facility — potentially up to 600,000 square meters — would feature a warehouse with plans to develop local distribution networks and optimize profitability.

“Our plan to open a tire factory in Mexico demonstrates our commitment to satisfy the growing demand for high-quality tires in the region,” Hao Yu Shen said, according to Cluster Industrial, which also reported that ZC Rubber hopes to finish the first stage of construction in 12 months.

In addition to speaking to automakers and investors at the Beijing Auto Show, Jiménez met with investors at Mexico’s Embassy in the Chinese capital while also meeting with executives in Shanghai and Changzhou.

El Economista reported that during that September 2023 tour, Gov.-elect Jiménez spoke at a conference in Shanghai entitled “Invest in Mexico, Invest in Coahuila.”

With reports from Cluster Industrial, Mexico Industry, Zocalo and Vanguardia MX

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