Chinese tyre company Jiangsu General said it will soon issue shares on the Shanghai Stock Exchange in a non-public funding initiative for its upcoming manufacturing unit at Sihanoukville Special Economic Zone (SSEZ) in Preah Sihanouk province of Cambodia.
The foundation stone laying ceremony for Jiangsu General’s Cambodia factory, its second overseas factory, was held in January 2022. The tyre maker’s Thailand base already has a production capacity of one million all-steel radial tyres and six million semi-steel radial tyres.
The stock issuance plan shows that Jiangsu General will issue shares to not more than 35 specific investors. The number of shares to be issued shall not exceed 386,578,320 units, which is 30 per cent of Jiangsu General’s total share capital before the issuance of shares.
The total amount of funds raised will not exceed 1.018 billion yuan or $148.34 million. According to reports, HOdo Group, the controlling shareholder of Jiangsu General, will subscribe for shares in cash, with a subscription amount of not less than 30 million yuan ($4.37 million) and not more than 200 million yuan ($29.14 million).
The project is expected to create more than 1,600 jobs.
On January 11, 2021, Jiangsu Province Department of Commerce approved Jiangsu General Science Technology Co. Ltd’s (GS Tire) US$300 million investment in a new tyre factory in Cambodia. Company’s stock market filings had previously described that the factory would have a $204 million investment, which suggests the scope of the project increased significantly later.
Jiangsu General had recently announced the plans to invest 1.304 billion yuan ($203.947 million) in the construction of “high-performance semi-steel radial tyre projects in Cambodia”.
According to a stock marketing filing published on the Shanghai Stock Exchange on June 3, 2021, the new Cambodia factory will manufacture six million tyres a year initially. The construction of the new tyre factory will be completed by the end of this year.
In order to complete the construction project, Jiangsu General will set up a local subsidiary called General Rubber (Cambodia) Co., Ltd, to be registered at Sihanoukville Special Economic Zone, Cambodia. The limited liability company will begin with registered capital of 400 million yuan ($58.28 million), equalling less than a third of the overall construction project budget.
The project is also believed to form part of China’s ‘One Belt One Road” development strategy. SSEZ currently hosts 170 factories from the European Union, the US, China, and the Southeast Asian region and has generated some 30,000 jobs for the locals.
Jiangsu General’s plans for a Cambodia factory followed the firm’s investment in a Thailand tyre production facility in 2018 – changing from the earlier plans for a Cambodia factory that were halted in favour of the Thailand tyre production plant.
Jiangsu General is the 33rd largest tyre manufacturer in the world. However, with annual sales of $523.82 million in 2020 and at around this level for the last five years, the company is clearly a growing international player – a point underlined by its latest Cambodia tyre factory investment plans.
Jiangsu General’s range of tyre brands includes Maxima, Red Horse, Qi Ma, Starwood Pass and Express.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.
