(Yicai) Sept. 24 -- Linglong Tyre plans to expand its global manufacturing footprint by investing USD270 million in a new tire factory in Egypt, which will serve as an export hub for Europe, the Middle East, and Africa while reducing trade-related risks and fortifying the Chinese firm's international supply chain.

Linglong Tyre will set up a wholly-owned subsidiary in Egypt to oversee the new plant’s construction and operation, the Shandong province-based firm announced yesterday. The factory will be able to make 6 million semi-steel radial tires a year, with management projecting annual revenue of USD173 million and net profit of USD34.6 million. Construction will take two years.

Financing for the project will come mainly from the company's own capital and bank loans, it said, adding that the plan is subject to the completion of all required approval and filing procedures with the authorities in China and Egypt.

By locating the project in the north African country, Linglong Tyre aims to establish a manufacturing and distribution platform that can serve not only the local market but also clients across Europe, the Middle East, and Africa. The facility is expected to work closely with the company's existing overseas plants, improving regional order fulfillment and delivery efficiency.

Management expects the project to help reduce Linglong Tyre's exposure to trade restrictions, while supporting the company’s global expansion strategy and strengthening its long-term competitiveness.

Linglong Tyre, a large specialized tiremaker, has eight research and development centers and seven production bases worldwide, employing over 17,000 people. Its products are widely used in passenger and commercial vehicles as well as in other machinery.

Shares of Linglong Tyre [SHA: 601966] closed 1.3 percent lower at CNY10.41 (USD1.55) each today. The benchmark Shanghai Composite Index gave up 1.2 percent.

Editor: Tom Litting