The estimated size of tire market in Saudi Arabia is over 30 million units. The demand for the tires is mostly met by importing them from other countries like China, Japan, Thailand, and South Korea. This is where Black Arrow Tire Co. (Blatco) sees potential for improvement, growth, and business. The famous tire manufacturing company, after several years, has made it official that the construction of the tire production plant in Saudi Arabia will commence at the end of this year or the start of next year i.e. 2024.
The tire plant under discussion would be the first one in Saudi Arabia of its kind and the estimated start-up cost for the plant is $1.5 billion. The plant will be constructed in Yanbu on The Res Sea Cost. The aim of Blatco is to start the engineering work by the fourth quarter of 2023 or by the first quarter of 2024. In an interview at Tire Technology Expo in Hanover, CEO Adel Al Masood said “Blatco aims to start the engineering work by the fourth quarter to this year and, if not, then Q1 2024.”
The CEO added while accompanied by Blatco Chairman and Vice Chairman i.e. Abdullah Al Wahibi and Hassan Al Othman “Construction will then start three months later, so by the middle of 2024.” This mega-scale tire manufacturing plant will start the manufacturing process in two phases.
- Phase 1: in the first phase, the plant is aimed at producing up to 7.5 million PCR and TBR tires a year.
- Phase 2: in the second phase, the plant will double its production which means that over 15 million tires will be produced per year in this phase.
Blatco is partnered with a Korean tire manufacturing company i.e. Kumho Tire Co, and at the time, Kumho has to give a green light to start the process of construction. Kumho Tire Co. signed a MoU or Memorandum of Understanding in January, 22 after deciding to become partners with Blatco for this mega-project in Saudi Arabia.
For Blatco to go ahead with the project, an agreement signed by Kumho Tire Makers is necessary. In this regard, the CEO of Blatco Adel Al Masood said about the agreement “We feel comfortable that will be done before the end of this year.”
What needs to be noted that around the same time when Masood made this statement, members of the Kumho team were paying a visit to the Saudi Authorities, government agencies, and the project site for the tire manufacturing plant. CEO of Blatco Adel Al Masood added “Finalizing all the details requires a lot of due diligence and agreement on many, many details.”
When the plant starts the production, the aim of the company is to capture the local tire market. The Short-term goal of Blatco is to capture 15% of the total tire market in Saudi Arabia by the end of 2026. The plant that can produce 30 million units in a year is fully equipped to handle the market demand for tires in Saudi Arabia.