China’s Sailun Group and the China-Egypt TEDA Suez Economic and Trade Cooperation Zone have signed a contract to build a tire factory in the Suez Canal Economic Zone, an Egyptian cabinet statement said Wednesday. The facility, which will operate under the Sailun Group brand, will receive a $1 billion investment from the Chinese company as Beijing expands its automotive push in North Africa's largest economy.

The plant will take three years to build and will eventually produce 10 million tires annually, the cabinet said, adding that the first phase was due to be completed in 2026. The tires will serve both domestic demand and export markets.

What happened: During the signing ceremony in Cairo between the CEOs of the two companies, Egyptian Prime Minister Mostafa Madbouly, who was present, said that the project aligned with his country’s strategy to localize the automotive industry and manufacturing supply chains.

Founded in 2002, Sailun is one of China’s biggest automotive producers with factories across China and Vietnam. It churns out more than 26.6 million truck and bus radial tires, 88 million passenger car radial tires and 310,000 tons of off-road tires a year.