South Korea’s Kumho Tire, a subsidiary of China’s Doublestar, has tied up with Saudi Arabia’s Blatco (Black Arrow Tire Co.) to establish a factory in Riyadh for tyre production, since currently there is no tyre production in Saudi Arabia. This was part of the Saudi-South Korean Business Forum held in January where 13 agreements were signed, of which ten were signed by the oil major Saudi Aramco. Several sources have said that the factory’s production capacity will reach 15 million tyres/year and that production is expected to start in the third quarter of 2023.
Kumho confirmed the news, but the two sides (Kumho and Blatco) differ on the progress of the talks. While Blatco released detailed plans for the tyre manufacturing operation to be built in the Riyadh region of Saudi Arabia, a spokesperson for the Kumho headquarters said, “It was literally a MOU agreement to start discussing the project in depth. as a technical partner and that it will take more time to make detailed plans regarding such an agreement “.
Kumho was particularly clear that the production capacity, start of production and other details published in the press “are not correct” and that “nothing has been decided yet”.
On its website, Blatco says it was founded in Riyadh in 2019 with the aim of “creating a tyre manufacturing plant with a global partner as a joint venture”. Achieving this would make such a factory “the first of its kind in the MENA [Middle East of North Africa] region”, making Blatco “a regional leader in automotive manufacturing”.
According to Blatco, its intention is to make tyres for passenger cars, SUVs, trucks and buses, as well as aircraft tyres, with an output of 10 million tyres/year. Additional land area will be available to increase the production to 15 million tyres/year. It also intends to capture 15% of the tyre market share in Saudi Arabia by 2026.
Currently, more than 50 tyre brands (eg. Bridgestone, Michelin, Good year, Dunlop, Yokohama, Hankook, Pirelli, Kumho & Max) are imported annually into Saudi Arabia, with the tyre market valued at US$4 billion, at a CAGR of around 6%.