Riyadh-based Black Arrow Tire Co., or Blatco, has tied up with Thailand’s Golden Star Rubber Co. to construct a tyre manufacturing facility in Yanbu, with a US$470 million investment.
The plant will initially produce 4 million tyres/year for passenger vehicles, with plans to expand production to 6 million tyres/year, including truck and bus tyres.
The Yanbu facility is set to boost Saudi Arabia’s industrial capabilities and will create more than 2,000 local jobs. The partnership will supply the facility with the natural rubber required for tire production in the Kingdom.
The Saudi tyre market, which produced 22.6 million units in 2023, is projected to grow at a compound annual growth rate of 1.26%, reaching 25.5 million units by 2032, according to market research firm IMARC Group.
Largely import-driven, the sector is dominated by Chinese tyre brands due to their affordability and availability. However, flagship brands have gained traction in recent years, thanks to their higher quality and longer product lifecycles, the report added.
The plant will be situated in the industrial city on the Red Sea, under the Royal Commission for Jubail and Yanbu. Blatco officials anticipate that 50% of production will be consumed locally, with the remainder to be exported to regional markets.
Earlier this year, Blatco signed a 20-year technology export agreement with South Korea’s Kumho Tire. As part of the deal, Kumho Tire agreed to supply Blatco with the technology to produce passenger car tyres for the Middle East, including Saudi Arabia.
Founded in Riyadh in 2019, Blatco aims to become a key player in automotive manufacturing and distribution in the region. The company focuses on contributing to Saudi Arabia’s economy, creating jobs, and supporting technology transfer initiatives, according to its website.
In October 2023, Saudi Arabian Public Investment Fund (PIF) announced a separate US$550 million tyre factory in a joint venture with Italy’s Pirelli.
PIF holds a 75% stake in the venture, with Pirelli providing technology and commercial support. The facility, set to begin operations in 2026, will produce tyres for passenger vehicles under the Pirelli brand and a new local brand for domestic and regional markets.