On August 28, General Science Cambodia Company held a ceremony for the first batch of the second phase project to roll off the production line at its production base in Sihanoukville Special Economic Zone. Chairman Gu Cui, General Manager of Overseas Company Gu Yahong and others attended the ceremony. This project is another breakthrough following the full production of the first phase of the Cambodia factory in May this year. It marks the further release of GS's high-performance, green and high-quality overseas production capacity, and a new step in the internationalization strategy process.
It is understood that the Cambodia base of GS is the second production base established overseas by the company after the production base in Thailand in response to the "Belt and Road" initiative. It is also the first project in Jiangsu Province with an investment of over 100 million US dollars in an RCEP member country after the entry into force of RCEP.
After the first phase of the project was put into production in 2023, orders continued to be full, production and sales were booming, and full production was achieved in just one year, achieving the goal of "production and profitability in the same year", becoming the company's new performance growth engine.
The designed production capacity of the Phase II project includes 3.5 million semi-steel radial tires and 750,000 full-steel radial tires per year. After full production, it is expected to achieve an average annual revenue of 1.701 billion yuan and an average annual net profit of 231 million yuan. The project started construction in January 2024 and took 7 months to complete the first tire rolled off the production line with high efficiency, once again setting a new record for the speed of overseas project construction in the tire industry and demonstrating GS's technical strength and team capabilities.
In recent years, GS has focused on the development opportunities of "domestic and international dual circulation" and implemented the company's "5X Strategic Plan", accelerating the transformation and upgrading of international, intelligent and green industries, and vigorously cultivating new quality productivity. It is worth noting that in the first half of 2024, GS's domestic OTR off-road tire technical transformation project, 6 million semi-steel tire technical transformation project and Thailand Phase II 10 million project have been put into production one after another. At the same time, the company has launched site selection and investigation for new overseas bases, and will continue to promote the release of high-quality production capacity, continuously enhance the ability to resist risks from trade barriers, and provide users with greener, safer, and more cost-effective products and services, there is broad room for future growth.
The relevant person in charge of GS said that the second phase of the Cambodia project focuses on "high quality and low carbon" and strives to develop high-performance green new energy tires of its own brand. At the same time, it draws on the successful experience of the domestic semi-steel tire factory "dark light workshop" and the full-steel tire "5G Carbon Cloud Smart Factory", aiming to build Southeast Asia's leading intelligent, automated, and information-based tire model factory, and is committed to improving the "human efficiency, energy efficiency, and product efficiency" of the entire process, which is of great significance to optimizing the company's production capacity layout and structure, and enhancing its core competitive advantages and profitability.
On the same day, US released its 2024 semi-annual report. Benefiting from the growth in production and sales of the domestic automobile industry and the strong demand in the overseas tire market, the company relied on the advantages of the "overseas dual base" layout in Thailand and Cambodia to achieve significant growth in tire production and sales, and significantly improved profitability. In the first half of the year, the company achieved operating income of 3.068 billion yuan, a year-on-year increase of 36.91%; and achieved net profit attributable to shareholders of listed companies of 287 million yuan, a year-on-year increase of 393.32%. The net profit for the first half of the year exceeded the full year of 2023, setting a record high for the same period in history. It is worth mentioning that the first phase of the Cambodia base project contributed more than 90 million yuan in net profit to the company in the first half of the year, and its profitability and development potential are broad.
Industry insiders analyzed that in the long run, China's tire companies are constantly improving their core competitiveness such as product cost-effectiveness and technological innovation. With the second round of overseas expansion and the rise of China's new energy vehicle industry, the global market share is expected to increase further in the future.
According to data from the Cambodian Ministry of Commerce, Cambodia's exports of automobile tires reached US$370 million in the first half of 2024, an increase of 188% over the same period last year. For Chinese tire companies with production bases in Cambodia, including GS, their brand competitiveness and cost-effectiveness will be further highlighted.
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