Company factory Linglong Tire in Serbia is operating with growing losses, the latest financial report showed Chinese tire manufacturing giant.
In the first half of this year, the factory in Serbia, in which the company has invested significant funds, generated revenue of around 153,4 million euros, which is a growth of 148,1 percent compared to last year, eKapija reports.
However, the net loss amounted to 16,6 million euros, surpassing the loss from the same period last year of 6,4 million euros, which surprised many investors.
During the conference on the presentation of business results, several investors asked when the factory in Serbia would become profitable.
Sun Songtao, Secretary of the Board of Directors of Linglong Tire, stated that as the production capacity is gradually released and the volume of production and sales continues to grow, the factory in Serbia will strive to achieve profitability as soon as possible.
Regarding the degree of capacity utilization of the factory in Serbia, Sun Songtao stated that the production capacity of the factory in Serbia is currently in a phase of constant increase, and that the total capacity utilization is about 85 percent.
According to Linglong's financial report, gross margin on sales in the second quarter was 16 percent, down 6,1 percentage points year-on-year, mainly due to rising raw material costs and the impact of tariffs.
Specifically, the total cost of purchasing four key raw materials: natural rubber, synthetic rubber, carbon black and steel cord, increased by 0,7 percent compared to the same period last year.
Linglong's tire factory in Zrenjanin, which was built in 2019 and in which one billion dollars was invested, officially started serial production in mid-September 2024.
Last year, the company also announced that it is planning an additional investment of 645 million euros to increase production.
