Tire Industry: Chinese Qingdao to Build $297 Mln Plant in Morocco

Qingdao Sentury Tire Company is planning to build a $297 million radial tires manufacturing plant in Morocco’s northern city of tangier. The new investment shows that Morocco continues to attract foreign investors due to its political stability, geostrategic position, skilled manpower, connectivity and proximity to European, Mideastern and African markets.

The Tangier tire factory will have an annual output of 6 million high-performance car and light truck radial tires, said the company in a statement.

The tire maker expects the construction of the project to be completed in 18 months with the output in the first year of operation reaching 3.6 million pieces.

Ramp-up to full production is expected in the second year of operation, the statement added, without giving a date for the start of construction work on the project.

Sentury said the project will be financed through ‘self-raised funds’ and is expected to make operating income of $210 million, total profit of $51.88 million, and total investment yield of 17.48% in normal operation years.

Explaining the reasons behind the investment, Sentury said the existing production capacity at its factories in Qingdao, China and Rayong, Thailand, could “no longer meet the growing order needs of customers.”

The tire maker said it selected Morocco as its investment location, as the country offered a stable political and economic environment and “an excellent geographical location” in terms of proximity to Europe.

Morocco is a hub connecting the three major markets of the European Union, the Middle East and Africa, the company said.

Furthermore, the country provides “favorable investment conditions” as well as good foreign trade policies, low investment costs, and close economic and trade relations with European and American markets.