The representatives of the Shandong Linglong Tire Co., Ltd. and the Government of Serbia signed on Thursday an agreement worth 1 billion dollars for the construction of a tyre factory in the northern town of Zrenjanin, the Beta news agency reported.
The final contract is expected to be signed in China with its President Xi Jinping in mid-September during the visit by his Serbia’s counterpart Aleksandar Vucic to Beijing.
That will be the first Shandong Linglong's investment in Europe and will be realised in three stages starting in 2019 and finishing in 2025 at the cost of 994 million dollars.
The company plans to produce more than 13 million high-quality radial tires at the plant every year. It expects revenue to reach 603 million dollars a year with profits of 163 million.
Vucic who witnessed the signing of the agreement said that most probably a company for zinc production, which closely cooperated with Shandong Linglong, would also come to Zrenjanin and open 500 new jobs.
The Shandong Linglong said the decision to invest in Serbia was taken because of low costs of construction, labour and power compared to other European countries.
Vucic said that Serbia would secure substantial subsidies to the Chinese investor for creating new jobs.
The company sells tyres in 180 European countries, in the Middle East, US, Africa and Asia.