China's Shenma to Build Tire Cord Factory in Thailand

Chinese tire cord manufacturer Shenma Co., Ltd has unveiled plans to establish a new PA66 tire cord facility in the Thai 'Eastern Economic Corridor' industrial zone, situated in Rayong, Chonburi. The company is set to invest €32 million (Yuan 252 million) in the project, signaling a significant move towards international expansion and response to the trend of Chinese tire manufacturers establishing overseas bases.

The upcoming plant will be constructed in two phases and is designed to have an annual production capacity of 20 kilotonnes, specifically focusing on the production of 'differentiated fiber' for tire manufacturing purposes. In a stock exchange filing on January 18, Shenma detailed that the initial phase of the project is anticipated to be completed within 15 months, boasting a nameplate capacity of 10ktpa for nylon yarn production.

Shenma's strategic investment aligns with its broader 'internationalization strategy,' reflecting the company's commitment to staying abreast of industry trends and catering to the evolving needs of its customer base. The decision to establish a production facility in the Thai industrial zone serves multiple purposes for Shenma, including cost reduction in sales, heightened product profitability, and improved responsiveness to the downstream market in the Southeast Asian region.

Proximity to downstream customers in Southeast Asia is anticipated to play a pivotal role in Shenma's strategy, allowing the company to enhance its market presence and offer swift responses to the demands of the local market. This strategic positioning aligns with the broader industry trend, where manufacturers are increasingly establishing facilities in close proximity to their target markets to optimize logistics, reduce costs, and strengthen relationships with customers.

Moreover, Shenma's venture into Thailand is positioned as a proactive response to the growing trend of Chinese tire manufacturers setting up overseas bases. The move is not only strategic in terms of market proximity but also emphasizes the company's commitment to adapting and expanding its global footprint in response to evolving industry dynamics.

Beyond the immediate benefits of cost reduction and enhanced market responsiveness, Shenma aims to leverage its Thai manufacturing base to expand exports to other Asian markets. This signifies a broader ambition to position the Thai facility as a regional hub, catering not only to the Southeast Asian market but also extending its reach to neighboring regions.

Shenma's investment in a new tire cord facility in Thailand represents a significant milestone in the company's internationalization strategy. The move aligns with the broader trend of Chinese companies establishing overseas bases to optimize their global operations and cater to the specific needs of regional markets. With a focus on proximity to downstream customers, cost-effectiveness, and expanded market reach, Shenma's venture into Thailand underscores its commitment to staying at the forefront of industry trends and maintaining a resilient and adaptive presence in the global tire cord manufacturing landscape.