Sailun Jinyu Group, a Chinese manufacturer of tires for light-duty vehicles, has announced it will open a plant in León, Guanajuato, with an investment amounting to US $240 million.

This will be the first manufacturing plant in North America for Sailun Jinyu Group, which is headquartered in Qingdao, China. The León location will manufacture semi-steel radial tires for cars, SUVs and small trucks.

The move is the result of a joint venture between Sailun Jinyu and TD Mexico, the parent company of Tire Direct and the largest tire distributor in Mexico.

The partnership will be named SL & TD Tire Manufacturing, and will be predominantly owned by Sailun. Its Singapore subsidiary will hold 51% of the stake, while Tire Direct will hold the remaining 49%. Sailun will oversee construction, equipment installation, and production of the plant, while TD Mexico will provide administrative support and manage process flows.

To build the plant, Sailun and TD Mexico have allocated US $192.78 million to be distributed over a 12-month construction phase. Once the plant starts operating, it is expected to create over 650 jobs.

The venture has set an initial production target of 6 million semi-steel radial tires annually. It also plans to produce 1.65 million all-steel radials per year for larger trucks and buses in a future expansion.  

Sailun estimates an annual revenue of US $219.42 million at total capacity, with a net profit of $4.06 million.

The tire market in Mexico is one of the largest and most competitive in the region. Across the country, Sailun has global competitors such as Michelin, Pirelli, Goodyear, Bridgestone, Continental and Hankook.

According to data from the National Association of Tire Distributors and Renewal Plants (ANDELLAC), the Mexican tire market moves around 6 million units annually, with an estimated value of more than US $2.5 billion.

With reports from El Sol de León