(Yicai Global) Feb. 21 -- Chinese car tire manufacturer Qingdao Doublestar is teaming up with UBE Development, the developer of a Cambodian special economic zone, to build a tire factory in the Southeast Asian country in order to circumvent international trade barriers and make its products more competitive on the global market.

Costing CNY1.4 billion (USD210 million), the facility will be located in the Special Economic Zone of Kratie and will produce 8.5 million high-performance radial tires a year, the Qingdao, eastern Shandong province-based company said yesterday. Construction should be finished within 15 months.

Doublestar will invest in the form of factory equipment and cash and take an 80 percent stake in the joint venture while UBE Development will supply the land use rights and cash for the remaining equity, said Doublestar, whose parent firm Doublestar Group is also owner of South Korea’s second-largest tire maker Kumhu Tire.

By locating some of its production in Cambodia, Doublestar can make full use of its production equipment and avoid the risk of anti-dumping investigation in its major international markets, it said.

The factory is expected to generate CNY549 million (USD80 million) in net profit a year once it starts operations, and the project should be paid-off within three-and-a-half years, including the construction period, it said. It has a promising future and will bring good economic returns.

Doublestar’s share price [SHE:000599] closed the day flat at CNY4.89 (USD0.71). Earlier in the day it gained 1.4 percent to CNY4.96.

Editor: Kim Taylor