SEOUL, South Korea — Kumho Tire Co. Inc. has agreed to supply manufacturing-related technology to Black Arrow Tire Co. (Blatco), a Saudi Arabia enterprise planning to build a tire plant in that country.
Under the 20-year deal, Kumho will provide Blatco with technology necessary for the production of passenger tires sold in the Middle East, including Saudi Arabia.
Blatco plans to build a 915,000-sq.-ft. factory in a western Saudi industrial complex by 2027. Blatco said the factory will have a production capacity of 7.5 million passenger, SUV, truck/bus and aircraft tires a year in its first phase. Blatco said eventually the plant could produce 15 million units a year.
According to Kumho, Blatco's project has "strong support" from the Saudi government as part of the country's "Vision 2030 policy" that aims to diversify the Saudi economy. The country is preparing for the future by strengthening investment in manufacturing, Kumho said.
"Saudi Arabia is continuing its solid growth as the largest automobile tire market in the Middle East," Kumho CEO Jeong Il-taek said. "We will prove our technological competitiveness and, at the same time, lay the foundation for growth in production and sales in the Middle East market."
In the future, Blatco intends to develop new products and enhance quality through its partnership with Kumho.
"We have finalized a technology export agreement with Kumho Tire to proceed with the project, and we plan to begin construction of the factory next year," Blatco CEO Adel Al Massoud said.
Blatco and Kumho initially announced their planned investment in the 'mega-scale tire factory' in 2022 and had previously set a mid-2024 date for start of construction work.
The Kumho-Blatco is one of two tire-manufacturing projects being planned in Saudi Arabia.
The other is a $550 million joint-venture project involving Pirelli Tyre S.p.A. and Saudi Arabia's Public Investment Fund.
Set to commence production in 2026, the facility is designed to manufacture 3.5 million passenger tires per year, including "high-quality" tires under the Pirelli brand and tires under a new local brand for domestic and regional consumption.
The PIF will hold a 75% stake in the venture, with Pirelli holding the remaining 25% and acting as strategic technology partner.
