(Yicai Global) Dec. 20 -- Qingdao Sentury Tire plans to invest EUR523 million (USD589 million) to construct a car tire plant in Spain to better meet European demand. It will be the Chinese car tire maker’s third production facility worldwide and will increase output by almost 50 percent.

The project will have an annual capacity of 12 million tires once it is up and running in late 2025, a big jump from the 22 million tires the firm is currently making a year, Sentury said yesterday.

Located in Galicia, it is expected to rake in yearly profit of EUR114.6 million (USD129 million) and revenue of EUR504 million (USD567 million), the company said. Based on these figures, it will take at least seven years to pay back the original investment.

The plant will make a number of products including the radial tires used in high-performance cars and lightweight trucks, the Qingdao, eastern Shandong province-based firm said. The first phase should be finished by the end of 2024 with a yearly output of six million tires.

Sentury runs two other production facilities in its home base of Qingdao and in Rayong, Thailand. It focuses on high performance and large-sized radial tires, which refers to the treadmarks running at 90 degrees to the direction of travel.

Sentury’s share price [SHE:002984] closed down 0.96 percent at CNY35.97 (USD5.64) today.

Editor: Kim Taylor