A Chinese company is planning to spend $1bn on a tyre factory in Serbia’s Zrenjanin Free Trade Zone.
According to a filing by Shandong Linglong on the Shanghai Stock Exchange, it intends to break ground on the plant in April 2019.
The project will proceed in three stages, completing in 2025, after which it will be able to produce 13.6 million radial tyres a year, SeeNews website reported.
Shandong Linglong said it had decided to build the 4.2 million sq ft factory in Zrenjanin because of Serbia’s lower investment, construction, labour and energy costs, compared with other countries in Europe. It had considered Poland, the Czech Republic, Slovakia and Hungary before opting for Serbia.
Shandong Linglong became a sponsor of the Juventus football team in February (pictured).
Trade magazine Rubber News reports that the company has already built one overseas factory, in Rayong, Thailand, and had been looking for the site for its second for the past two years.
Zrenjanin is a city of about 75,000 located in Province of Vojvodina, roughly 80km north of Belgrade.
The project is subject to approval by China’s National Development and Reform Commission, as well as the country’s trade ministry and State Administration of Foreign Exchange.
Shandong Linglong is China’s third largest tire maker with annual sales of more than $bn.
News of the investment follows months of rumours in the Serbian media that Linglong planned to spend some €400m in the country.
Serbia has a claim to be the European country with the closest economic and diplomatic ties to China. The Serbian government says Chinese investment reached around $6bn by the end of last year, and the Bank of China even opened a Serbian branch in January 2017 to service Chinese companies looking at business opportunities in Serbia.
Image: Linglong tyres became a sponsor of the Juventus football team in FebruaryÂ (Juventus)