Sailun Tyres, a Chinese firm, has expressed its interest in establishing a tire manufacturing factory in Nigeria to cater to the African market.
The company is currently conducting research to assess the feasibility of this venture. Mr. Xie Xiaohong, the Executive President of Sailun Tyres, led a delegation to Nigeria and shared this information with journalists in Lagos.
Xiaohong mentioned that Sailun Tyres has already gathered extensive data on tire usage in Nigeria, the unique environmental conditions, and the nature of the roads.
The company’s interest in Nigeria was influenced by President Bola Tinubu’s commitment to revitalizing the economy and attracting foreign investments.
“We have heard about President Tinubu’s efforts to strengthen the country’s economy. We believe that effective transportation and high-quality tires designed for Nigerian road conditions are crucial for achieving this goal,” Xiaohong stated.
“Our visit to Nigeria aims to conduct market research, expand trade, and strengthen our partnership with Tanzanite Ltd.”
He further emphasized that Sailun Tyres develops tires suitable for tropical climates and Nigerian road conditions.
He pointed out that China faced similar road challenges in the year 2000, and their tires were reinforced for durability.
During their visit, the executives from Sailun Tyres engaged in strategic discussions with leaders from Tanzanite Ltd, a prominent tire distributor in Nigeria and Africa. Their objective was to identify opportunities for mutual growth and explore ways to enhance customer satisfaction.
The establishment of a tire manufacturing plant in Nigeria would restore the country’s pride to its position three decades ago when it had two plants, Dunlop and Michelin, producing tires domestically.
These plants were exporting their products across the subcontinent and creating numerous local job opportunities.
Experts attribute the collapse of the local tire industry to the Federal Government’s policy changes in 2006, which significantly reduced import tariffs.
This exposed the local industry to cheaper and often substandard foreign products, compounded by poor infrastructure, particularly inadequate power generation that hampered local manufacturing.
To attract investors in tire manufacturing, the Lagos Chamber of Commerce and Industry (LCCI) has consistently advocated for Dunlop and Michelin’s return, as they are familiar with the terrain and can swiftly resume operations.
The LCCI has also proposed tax holidays for five years, removal of import duties on machinery and equipment, and an increase in import duties on foreign tires to encourage local manufacturers.
Experts additionally recommend that the Central Bank of Nigeria provide funding to support local tire production.
However, the Federal Government has recently taken affirmative actions and made statements indicating a liberalization of the economy, which is viewed positively by foreign investors.
These policy decisions include the unification of the country’s exchange rates, deferment of tax implementation, and removal of subsidies.
This allows investors to plan and project for the future, with market forces driving economic dynamics instead of forceful and unsustainable controls that led to economic distortions and price fluctuations.
Both local and foreign stakeholders have applauded these recent policy measures. Moreover, Nigeria already possesses a relative advantage in rubber production, which is the key ingredient for tire manufacturing.
In 2017, Nigeria produced approximately 53,000 tonnes of natural rubber, with rubber plantations located in several states across the country. Currently, rubber consumption within Nigeria is mainly limited to the footwear sector and for export.
However, the production of local tires would create new demand for natural rubber, benefiting the rubber-producing states and the nation as a whole, leading to prosperity and growth.