(Yicai) Aug 1 -- Hailide New Material, a Chinese manufacturer of tire cord fabric which counts Michelin, Bridgestone, and Continental as some of its clients, intends to invest USD52 million in kicking off a new facility in southern Vietnam to minimize any adverse effects of trade frictions.

The first phase of the 56,380-square meter factory in Tay Ninh province is expected to cost USD52 million and have an annual capacity of 18,000 tons of the fabric that is used to reinforce tires, the Zhejiang province-based firm said in a statement yesterday, without disclosing the project timeline. The undertaking includes ancillary facilities such as warehouses.

This is not Hailide's first project in Vietnam as the company's USD155 million factory just achieved a milestone in June. More specifically, the Ho Chi Minh facility reached its planned initial capacity of 120,000 tons of polyester filament yarn.

The latest investment scheme is a prudent decision based on the current trade situation, industrial transfers, and demand forecast, Hailide said, adding that the firm can make full use of Vietnam’s cost advantages to optimize its production capacity. The move is also conducive to reducing risks caused by international trade frictions, it added.

Hailide already has an annual capacity of 60,000 tons of tire cords in its home country, according to the announcement. The firm earned CNY1 billion (USD143 million) in operating income from the segment last year, making up almost 19 percent of the total, according to the annual report.

However, the expansion plan was received mildly as Hailide's stock price [SHE: 002206] moved just 0.2 percent higher to close at CNY5.58 (US 80 cents).

Editor: Emmi Laine