Overview
Cailian Press, September 9 (Reporter Xiao Lianghua) — Starting from their concentrated venture into Southeast Asia, Chinese tire companies have opened multiple side missions on their overseas expansion path. A Cailian Press reporter found through review that since the beginning of this year, several leading tire companies have increased their bets on or expanded into Egypt, which is becoming the “second Southeast Asia” for the Chinese-invested tire industry.
“The first phase of the company’s Egyptian plant is progressing smoothly and is expected to start production within the year,” a relevant person in charge of Sailun Tire (601058.SH) told Cailian Press. Egypt has obvious location advantages. After the company started construction of its Egyptian plant relatively early, several Chinese tire companies have successively expressed plans to enter Egypt.
A Cailian Press reporter found through review that from 2026 to date, at least five Chinese tire industry chain companies have announced increased investment or investment in Egypt, with total disclosed investment exceeding USD 4.47 billion. “As of now, among Chinese tire plants that have left Southeast Asia, many projects have failed to meet expectations or even been terminated. Egypt has become a new consensus for Chinese tire companies going overseas. From the current perspective, Egypt has the potential to become a new highland for Chinese tire companies’ overseas expansion,” a person from a tire industry chain company analyzed to Cailian Press.
Tire Companies Head to Egypt in Droves
Egypt’s popularity within China’s tire industry has been rising continuously over the past two years.
On September 2, China’s Zhongce Rubber Group and the Suez Canal Economic Zone Authority signed a letter of intent. The two sides will study building a tire manufacturing complex in the Sokhna Industrial Zone of the Suez Canal Economic Zone. The project is expected to invest about USD 500 million, with an initial planned area of about 600,000 square meters. It is still in the project research and preliminary evaluation stage, and has not yet entered formal investment implementation or construction.
According to information published by Egypt’s Ministry of Investment and Foreign Trade, the proposed project is planned to be implemented in three phases. Its construction content includes passenger car and truck tire production lines, as well as industrial, service, and logistics facilities directly supporting tire production. Zhongce Rubber plans to export about 95% of its target output, mainly for African, Middle Eastern, and European markets.
On September 3, Linglong Group Co., Ltd. and Egypt’s Ministry of Industry formally signed a memorandum of understanding on cooperation in Cairo. The two sides reached a preliminary framework intention to jointly build an auto parts industrial park project.
According to the memorandum plan, the industrial park project covers about 3 million square meters and plans total investment of about USD 2 billion. Linglong Group will coordinate its controlled and affiliated subsidiaries and partners to establish tire manufacturing plants, industrial conveyor belt production lines, and tire raw material production facilities such as steel cord and carbon black within the park, and also cover other auto parts businesses.
In June, Sailun Tire announced that the company planned to increase capital by USD 1.141 billion to build the “Egypt Tire Capacity Expansion Project.” This was the company’s third large-scale investment in the Egypt project in less than a year. After implementation, the company’s Egypt project will form a complete capacity matrix with an annual output of 36 million semi-steel radial tires, 3.3 million all-steel radial tires, and 20,000 tons of off-the-road tires, achieving an order-of-magnitude leap in capacity at its North African manufacturing hub.
Chaoyang Long March Tire Co., Ltd. held a foundation-laying ceremony for a USD 190 million plant in Sokhna in June 2026; Aeolus Tyre (600469.SH) plans to invest about USD 399 million to build a plant in Alexandria; Zenith Steel Group plans to invest USD 300 million to build a plant in the TEDA Cooperation Zone with annual output of 120,000 tons of steel cord and 50,000 tons of bead wire.
According to statistics from the Cailian Press reporter, the above investments alone total about USD 4.52 billion (calculated at USD/RMB 6.71).
“Chinese tire industry clusters are being ‘relocated’ to Egypt in contiguous blocks, forming a closed-loop supply chain. Apart from Thailand, Vietnam, and Cambodia, Chinese tire companies’ overseas destinations have never been this concentrated,” the aforementioned tire industry chain source said.
Location Advantages and Tariff Dividends Attract Tire Companies
Why have Chinese tire companies chosen Egypt one after another? Industry insiders say Egypt has obvious location advantages. Logistically, Egypt can reach the Mediterranean directly via the Suez Canal, greatly shortening shipping time to Europe.
Egypt has joined multiple trade agreements and can fully enjoy tariff dividends. Among them, the Egypt-EU Free Trade Agreement, if rules of origin are met, allows products preferential access to the EU, avoiding anti-dumping duties on Chinese tires; it also covers the African Continental Free Trade Area and Middle Eastern Arab markets. In addition, Egypt has low labor costs, and the local auto assembly industry has supporting demand.
In addition, from the fundamentals of the regional market, Egypt is Africa’s third-largest auto market. Local car ownership is rising steadily, and tire consumption demand is growing over the long term. However, local tire manufacturing capacity is seriously insufficient, and market supply is highly dependent on imports. The supply-demand gap for high-end commercial vehicle and high-quality passenger car tires is difficult to fill in the short term, providing a stable local base for projects to absorb capacity.
Sailun previously said that increased production at the Egypt project will form regional complementarity with the company’s overseas plants in Vietnam, Cambodia, Mexico, and Indonesia, providing better economies of scale. The company estimates that under current market demand, fixed costs per unit at this scale will decrease, raw material procurement can form volume advantages, and logistics, utilities, and other supporting costs will be competitive after amortization, further strengthening the global price competitiveness of the company’s overseas products.
More importantly, against the backdrop of the EU’s anti-dumping and countervailing duty policies on Chinese tires, Egypt is expected to become a key fulcrum for Chinese tire companies to take on spillover orders from Europe.
Challenges and Risks
However, Chinese tire companies going to Egypt also face many new problems. The aforementioned tire industry chain source told Cailian Press that Egypt’s local currency exchange rate fluctuates greatly, and infrastructure and supply chain support are currently weaker than in Southeast Asia. In addition, the EU’s rules of origin review is strict, with hard requirements for the proportion of local materials. “Therefore, although our company has also visited Egypt for inspection, whether to build a factory in Egypt is still under consideration.”