(Yicai) April 2 -- Zhongce Rubber, one of China’s biggest and most diversified tire manufacturers, plans to invest CNY1 billion (USD145 million) to build the first phase of a new factory in Vietnam to better meet rising overseas demand, navigate global trade barriers more effectively and further expand its international footprint.

The factory, which will be located in Ho Chi Minh city, will have an annual capacity of about five million semi-steel radial tires, which are mainly used in passenger cars, the Hangzhou-based firm said yesterday. Construction is set to begin in early July and will take about a year to complete.

Once the plant is fully up and running, it is expected to generate CNY849 million (USD123 million) in additional annual revenue, with an estimated return on investment of 17.5 percent, the company said.

The new factory will mainly target markets in member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which is a free trade pact in the Asia Pacific region, as well as Europe and Southeast Asia, it said. Demand for Chinese-brand tires in these regions is steadily growing, and since the firm already has well-established sales channels there, the outlook for the new plant looks good.

Zhongce Rubber, whose clients include major automakers such as BYD, Toyota Motor and Stellantis, said its long-term goal is to become a leading multinational tire company, so it expects to keep building more factories overseas going forward. The firm already has production bases in Thailand and Indonesia, and is currently building another one in Mexico.

In the first half of last year, Zhongce Rubber raked in CNY9.9 billion (USD1.4 billion) in revenue from overseas markets, accounting for 45.4 percent of its total revenue, according to the company’s 2025 semi-annual report.

Zhongce Rubber’s stock price [SHA:603049] dipped 0.7 percent today to close at CNY49.19 (USD7.14). Earlier in the day it sank 1.8 percent to CNY48.62.

Editor: Kim Taylor