(Yicai) Aug. 15 -- Sailun Group has unveiled the Chinese tire maker plans to build a new factory in Egypt to better serve local and nearby customers and further enhance its ability to counter international trade barriers.

Sailun will invest USD291 million in a production facility with an annual output capacity of three million semi-steel radial tires and 600,000 all-steel radial tires in the Suez Canal Economic Zone in Egypt's Suez province, the Qingdao-based company announced yesterday. Construction is expected to last around one and a half years.

Semi-steel radial tires are primarily used for passenger cars or light commercial vehicles, while all-steel radial tires are mainly designed for heavy-duty trucks.

Once the Egyptian project is completed and put into operation, it is expected to generate an average annual operating revenue of USD190 million and an average annual net profit of USD34.8 million, with an estimated investment payback period of 6.15 years, according to Sailun.

Investing in a tire plant in Egypt will help the company better meet overseas demand through localized operations and closer proximity to new markets, respond quicker to the needs of downstream customers, and enhance its comprehensive services for foreign clients, Sailun noted.

By leveraging Egypt's geographical and policy advantages, Sailun also aims to expand into surrounding countries and regions, driving continuous growth in product sales and output volume, the firm added.

Sailun has production bases in China and others in Vietnam, Cambodia, Indonesia, and Mexico, with the latter two having just commenced operations two months ago.

Last year, the company's overseas market revenue surged 24 percent to CNY23.8 billion (USD3.3 billion), accounting for 75 percent of the total revenue, according to its latest annual financial statement.  

Sailun's shares [SHA: 601058] were trading up 1.5 percent at CNY13.27 (USD1.85) as of lunch break today.

Editor: Futura Costaglione