Sailun Tire Boosts Indonesia
On January 27, 2026, Sailun Tire (601058) announced on the Shanghai Stock Exchange that it would adjust its investment and optimize its production capacity at its Indonesian production base project. The total investment increased from the original US$251 million to US$299.7 million, equivalent to approximately RMB 2.148 billion, while simultaneously optimizing its product capacity structure to meet global market demand.
This capacity adjustment focuses on product category optimization to precisely address changes in market demand. After the adjustment, the project will have an annual production capacity of 6 million semi-steel radial tires, 750,000 all-steel radial tires, 10,000 tons of off-road tires, and 1.5 million sets of inner tubes and tire strips.
Specifically, the semi-steel tire capacity has more than doubled compared to the original plan, the all-steel tire capacity has increased by 25%, while the off-road tire capacity has decreased by 73%. The newly added inner tube and tire strip product line fills the supply gap.
This adjustment aligns perfectly with the global tire market demand structure. Data from 2025 shows that exports of semi-steel and all-steel tires to Belt and Road countries accounted for 60% and 72% respectively, indicating strong resilience in the replacement market demand. Meanwhile, off-road tires face structural overcapacity pressure.
To ensure project progress, Sailun Tire has planned a three-tiered subsidiary capital increase strategy, with a total increase not exceeding US$55 million. Specifically, the company plans to first increase the capital of its wholly-owned subsidiary Sailun Hong Kong by no more than US$55 million, then Sailun Hong Kong will increase the capital of its wholly-owned subsidiary Sailun Singapore by no more than US$54.45 million, and finally Sailun Singapore and Sailun Hong Kong will respectively increase the capital of the project's main entity, Sailun Indonesia, by US$54.45 million and US$550,000.
After the capital increase, the equity structure of the three subsidiaries will remain unchanged, and their registered capital will increase simultaneously, providing sufficient financial support for project construction.
This increased investment reflects a clear globalization strategy. Currently, global trade protectionism is on the rise, and trade barriers in Europe and the United States are continuously escalating. Domestic tire companies are increasingly mitigating policy risks by establishing factories overseas.
As a core market in Southeast Asia, Indonesia not only boasts abundant natural rubber resources and convenient port logistics, but also leverages regional trade agreements to radiate influence to surrounding markets and reduce supply chain costs.
Sailun Tire, the first Chinese tire company to establish an overseas factory, has already built a production network in Vietnam, Cambodia, Mexico, and other locations. The expansion of the Indonesian project will further enhance its global production capacity network.
From an industry perspective, the tire industry is entering a period of deep adjustment in 2026, characterized by structural overcapacity and growing demand for high-end products. Leading companies are accelerating their transformation towards high-quality development.
After adjustments, the Sailun Indonesia project is expected to achieve an average annual revenue of US$335 million and a net profit of US$62.55 million. It will be able to leverage local resources to reduce costs and increase efficiency, while also responding quickly to order demands from Southeast Asia and the global market.
Once operational, the project will further strengthen the company's competitiveness in high-demand categories such as semi-steel and all-steel tires, while simultaneously improving profitability through product structure optimization.
Currently, the Sailun Indonesia project completed the first production runs of semi-steel, all-steel, and off-road tires in 2025. This increased investment and capacity adjustment fall under the scope of project expansion and renovation.
With the increase in global car ownership and the popularization of new energy vehicles, the demand for tires continues to upgrade. By optimizing its overseas production capacity layout, Sailun Tire is expected to consolidate its leading position in the industry reshuffle and lay a solid foundation for global development.
