CDC approves new $450 million tyre factory in Kratie

CDC approves new $450 million tyre factory in Kratie

Kratie province is set to strengthen its position as a growing industrial hub of Cambodia following the approval of a new $450 million automobile tyre manufacturing plant by the Council for the Development of Cambodia (CDC).

CDC said in a social media post on Thursday that the new plant will be built in the UBE Snoul Special Economic Zone, marking the third tyre factory in the province and the eighth nationwide.

The new facility is expected to generate around 3,000 jobs, providing a significant boost to employment in northeastern Cambodia. Officials say the project reflects growing investor confidence in Cambodia’s manufacturing sector, particularly in automotive supply chains.

Over the past decade, Cambodia has actively diversified its economy beyond garments and footwear, attracting investment in higher-value manufacturing. The tyre industry, in particular, has seen steady growth due to competitive labour costs, preferential trade access, and improving infrastructure.

Kratie’s strategic location along key transport corridors and its proximity to regional markets have made it an increasingly attractive destination for industrial projects.

The establishment of a third tyre factory in Kratie underscores the province’s emergence as a specialised production cluster. Analysts note that clustering can help reduce logistics costs, improve supply chain efficiency, and encourage skills development among local workers. It may also stimulate supporting industries, such as rubber processing, as Cambodia is already a significant producer of natural rubber.

With eight tyre factories now either operational or in development across the country, Cambodia is positioning itself as a regional player in automotive component manufacturing, aligning with broader efforts to modernize its industrial base and integrate more deeply into global supply chains.

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These factories use a large quantity of locally sourced natural rubber as a raw material. Cambodia has also made significant progress in the last several years as a major tyre exporter. In 2025, tyre exports reached around $1.38 billion, a 57.86 percent increase from $874 million in 2024.

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