Vietnam Rubber Group will expand its own tire production

Vietnam Rubber Group JSC (VRG) plans to invest in tire and tire tube manufacturing through mergers and acquisitions through the subsidiaries of Vietnam Chemical Group (Vinachem).

As reported by GVR, the group is focusing on business restructuring and increasing investment in the rubber industry. At the moment, GVR is focused on several main areas of activity: it is engaged in the planting of rubber plants, processing of latex and rubber wood, the creation of industrial parks in the areas for growing rubber and high-tech agriculture. In the natural rubber segment, GVR manages over 400,000 hectares of rubber plantations with an average yield of 1.56 tonnes per hectare (as of 2019). However, in recent years, this business has tended to decline due to low selling prices for natural rubber. In addition, the COVID-19 pandemic further affects the demand for rubber and leads to a decrease in production.

Thus, expanding tire production can help the group improve its business.

In fact, the group entered this segment in 2017 when it partnered with Casumina (CSM) to produce rubber tires under the VRG brand.

Vinachem is a diversified chemical manufacturing conglomerate. In the tire segment, Vinachem is a major player in the industry with four tire divisions - Da Nang Rubber (DRC), Sao Vang Rubber (SRC), Southern Rubber Industry (CSM) and Inoue Rubber Vietnam Co Ltd. In 2019, Vinachem sold 9.4 million bicycle tires, 6.48 million motorcycle tires and 3.43 million passenger tires.

Exports of rubber tires improved after a strong second quarter of 2020, according to the company, with export sales valued at over $ 6 million in July and August, well above the same period last year.

The company also announces that it has commissioned an all-steel tire plant with a capacity of 600,000 tires per year.