From Tirereview.com:
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Linglong Rubber, based in the flourishing coastal province of Shandong, has an annual production capacity of about 9 million passenger car and truck tyres and thus is one of the biggest Chinese tyre manufacturers. Internationally, Linglong attracts attention because two thirds of its production is sold in export markets.
Apart from the main brand Linglong, the company's 8,000 workers also produce two other tyre brands called Shanling and Leao. But outside China it is mainly Linglong brand tyres that are sold. The company was put into the position of selling tyres on the European replacement markets since it started to operate a second tyre factory next to the first one. The new factory only produces radial tyres, explains export manager Merry Wang.
Currently, the privately owned company (owned by Wang Xicheng) manufactures about 2 million truck and about 5 million passenger car tyres every year; furthermore, Linglong still produces some 2 million diagonal tyres (truck, light truck, OTR). From this annual production, about 4 million passenger tyres (80%), 500,000 truck tyres (25%) and one million bias tyres (50%) are sold on export markets, says Wang in an interview with Tyres & Accessories.
"Our exports will grow when more sizes become available that suit these markets," she continues. This is where Linglong meets the general market trend in China because domestic competitors also target important export markets. For example, Linglong has recently introduced new winter patterns and in the near future the manufacturer is going to launch high performance tyres, Wang reveals.
In order to meet the expected growing demand from the domestic as well as export markets, Linglong is currently building its third tyre factory on the same site in Shandong province. After the commissioning of the two production lines, an annual output of about 2 million radial truck tyres is expected. Later on, a third production line will be added and, in 2008, passenger car tyres will be manufactured in the new facility although the export manager did not want to see the details of this investment published yet.
All in all, Linglong says that it is going to invest £220 million in its third tyre factory, according to Wang. If industry sources are accurate, Shandong Linglong has an annual turnover of £225 million.
Even in the future such investments will be made under Linglong's own leadership, says the export manager. There have been some negotiations in the past with potential Western co-operation partners such as Pirelli or Continental. But all talks failed because "they wanted to cooperate but have the majority." Linglong does not want to give up control over its three tyre factories, Wang makes plain.
If Linglong has its way there will not be any take-over through a Western manufacturer. However, the Chinese manufacturer is currently holding co-operation talks with two other potential partners who would allow Linglong to hold the majority stake. However: "With regards to technical agreements everything can be discussed."
Shandong Linglong Rubber Co Ltd.