(Yicai) Aug. 2 -- Sentury Tire, a Chinese tire manufacturing giant, has secured land to start building Morocco's first tire factory this month to increase its exporting strength while spending USD300 million.

Lin Wenlong, general manager of the Chinese company, inked an agreement with Jaafar Mrhardy, president of Tangier Technology City Development, to purchase around 200,000 square meters of land close to Africa’s largest container port and to confirm the Moroccan partner's involvement in constructing and operating the facility, China Securities Journal reported today.

In December, Qingdao-based Sentury said it will invest nearly USD300 million in self-raised funds to build an automobile tire plant with an annual capacity of six million units in the North African country. For this purpose, the company formed a unit in Tangier in April.

This is Sentury’s third plant outside of China as the firm has two other facilities in Thailand and Spain. The newest facility will be located 35 kilometers away from the Port of Tanger-Med which handles over half of all cargo going through Moroccan ports.

After the project is ready, Sentury will become the only tire maker in Morocco, hiking the firm's competitiveness globally. The endeavor is strategic as Morocco is the only country in Africa that has signed a free trade agreement with the United States. Thereby, tires that are exported to the US and Europe are tariff-free.

Sentury increased its profitability steadily last year as its net profit rose by 6 percent to CNY801 million (USD111.5 million) from 2021 while its revenue jumped 22 percent to CNY6.3 billion (USD876.8 million), according to the annual report.

China is the world’s largest tire producer and exporter as its output makes up over half of the world's total. However, in the past decade, the US and Europe began laying high anti-dumping duties on China-made tires so after that the Asian country has started exporting more tires to Russia, Southeast Asia, and Africa.

Chinese companies have been trying to avert the additional fees by building plants abroad and so far the main destination is Southeast Asia as one of the many resources of the region includes natural rubber.

Shares of Sentury [SHE: 002984] climbed 2.2 percent to CNY34.82 (USD.4.90) as of 2.34 p.m.

Editor: Emmi Laine