Products of the plant will be exported to the United States, Canada and Australia, said deputy general director Le Van Tri.

Casumina has signed a memorandum of understanding with a U.S. partner who has will invest around US$30 million in the plant and will distribute one million tires in the U.S. market each year.

According to Tri, this huge project worth VND3.7 trillion, or some US$180 million, is quite risky due to unexpected changes of the rubber market and high interest rates.

The firm has sold over 20 million tires and inner tubes for cars and motorcycles each year with VND3 trillion in revenue. However, the proportion of motorbike tires and tubes is being reduced to only around 20%.

"Our strategy is to increase investment in car tires production. This project when going into operation will help push the firm’s annual revenue to VND8 trillion,” Tri said.

The U.S. market consumes about 258 million car tires every year. This country is imposing a tariff of 35% for China-made products and 0% for Vietnamese products.

In addition to the tire plant, Casumina in cooperation with a foreign firm is developing a black carbon plant in Ba Ria-Vung Tau Province. The US$70-million plant will be operated next year, with an annual capacity of 300,000 tons in the first phase which will be doubled in the second phase.

Black carbon together with rubber is material for tire production.