In mid-June 2026, two leading Chinese tire manufacturers launched major industrial projects in Egypt one after another. Sailun Group unveiled a USD 1.141 billion plan to expand its tire production capacity in the country, while LONMAG Group held a groundbreaking ceremony for its new tire factory within the Suez Canal Economic Zone. Leveraging Egypt’s geographic connectivity to Europe, Africa and the Middle East plus preferential free-trade policies, top domestic Chinese tire enterprises are accelerating overseas capacity deployment to offset international trade barriers and cultivate local end markets worldwide.
1. Sailun Invests Billions to Scale Up Egyptian Facilities with Full-Range Global Tire Production
On June 17, Sailun Group issued an announcement on the Shanghai Stock Exchange to officially disclose its capacity expansion project in Egypt, with a total investment of USD 1.141 billion (equivalent to EUR 980 million).
The capital allocation is clearly defined: USD 1.09 billion will fund plant construction, supplemented by USD 42.1 million in working capital and USD 9.19 million in interest incurred during the construction phase.
Upon full completion, the project will add an annual output capacity of 27 million passenger car radial tires (PCR), 1.65 million truck and bus radial tires (TBR), and 20,000 tons of off-the-road tires (OTR), covering a complete product portfolio for passenger vehicles, commercial freight fleets and mining engineering machinery.
The company stated that this large-scale expansion will drastically boost the output of its Egyptian manufacturing base. Finished products will mainly supply markets across Africa, Europe and North America. Egypt’s free-trade location will shorten logistics routes and help the brand avoid punitive tariffs imposed on Chinese tire imports by overseas economies.
2. LONMAG Breaks Ground on New Egyptian Tire Plant, Building a Regional Manufacturing Hub in Two Phases
Also on June 17, LONMAG Group hosted the groundbreaking event for its tire manufacturing facility at the Ain Sokhna Integrated Industrial Park in Egypt. The project carries a total investment of 9.5 billion Egyptian pounds, equal to USD 190 million, covering a land area of roughly 200,000 square meters.
Production will roll out in two phases. Phase One focuses solely on commercial vehicle tires with a planned annual capacity of 600,000 truck and bus radial tires. After Phase Two upgrades are finished, the factory’s TBR output will rise to 1 million units per year, alongside an additional annual capacity of 4.5 million passenger tires. No production line for off-the-road tires is included in the current blueprint.
Jin Yongsheng, Chairman of LONMAG Group, commented at the groundbreaking ceremony that the Suez Canal Economic Zone offers highly competitive investment incentives and complete logistics support. The new plant marks a core strategic milestone in the group’s global expansion roadmap. Its output will first cater to local Egyptian demand before radiating to clients across the Middle East, Africa and global markets via the Suez Canal shipping network.
3. Industry Insight: Egypt Emerges as the Core Overseas Hub for Chinese Tire Manufacturers
The simultaneous launch of two landmark Chinese tire projects within one week is no coincidence, driven by three pivotal competitive advantages:
Geographic & Logistical Benefits
Egypt controls access to the Suez Canal, the vital maritime nexus linking Europe, Africa and the Middle East. Local manufacturing cuts long-distance shipping costs and transit times compared to direct exports from China.
Mitigation of Tariff & Trade Barriers
Egypt has signed free trade agreements with the EU and numerous African nations. Tires produced locally in Egypt can be exported to Europe and Africa without steep anti-dumping and anti-subsidy duties, solving long-standing export pressure facing China’s tire sector.
Comprehensive Industrial Zone Policy Support
The Suez Canal Economic Zone provides all-round incentives including discounted land use, tax breaks and integrated industrial supply chains, lowering the overall operating costs of overseas manufacturing plants.
Strategically, the two firms follow distinct paths. Sailun is expanding its existing mature overseas base with ultra-large, full-category production capacity targeting mass global export markets. LONMAG, by contrast, is building its first greenfield factory in Africa. Starting with commercial vehicle tires, it maintains a relatively compact production scale and prioritizes deep penetration of Egypt and neighboring regional markets.
Industry analysts forecast that Chinese top tire makers will maintain a fast pace of overseas factory construction throughout 2026. Localized overseas manufacturing has become a long-term core strategy for the sector. Beyond Egypt, Southeast Europe and Southeast Asia stand out as key investment destinations. By shifting production closer to end consumers, enterprises balance domestic supply-demand dynamics and hedge cross-border trade risks.
As construction progresses on both the Sailun and LONMAG projects, Egypt’s tire industrial cluster will see substantial expansion. This wave of investment also signals a major leap forward in localized supply capacity for Chinese tire brands serving European and African markets.
