Thai company to help build tire plant in Saudi Arabia
Saudi company Black Arrow Tire Co. (Blatco) has signed a partnership agreement with Thai Golden Star Rubber Co. to build the largest tire plant in the Middle East, which will be located in the city of Yanbu (Saudi Arabia), with a project cost of $470 million, writes Arab News.
According to the partners' plans, in the first phase, the plant will produce 4 million passenger car tires per year, and in the future, the enterprise's capacity will be increased by 1.5 times, and the production of tires for trucks and buses will be launched. The agreement also implies the supply of natural rubber to meet the plant's needs, and it is expected that about 2,000 jobs will be created at the enterprise.
According to IMARC Group, in 2023, the capacity of the Saudi tire market was 22.6 million units, and its forecasted compound annual growth rate is 1.26%. Currently, there is no tire production in the country, and the market is largely dominated by Chinese brands, which lead due to low prices. At the same time, in recent years, as analysts note, premium brands have been strengthening their positions in the country due to "higher quality and longer product life cycle".
The partnership agreement was signed by Blatco Board Chairman Abdullah Al-Wahaibi and Golden Star Board Chairman Amir Zafar in the presence of Saudi Arabian Federation of Chambers of Commerce President Hassan Al-Hwizi, reports Al Ekhbariya. It is noted that the new project will contribute to the development of Saudi industry and will be supported by the Saudi-Thai Business Council, established to strengthen commercial and investment relations between the two countries.
Yanbu is an industrial city on the Red Sea coast, which is under the jurisdiction of the Royal Commission for Jubail and Yanbu, and it is reported that about 50% of the products will be sold domestically, and the rest will be supplied to regional markets.
Earlier, Blatco signed a technological partnership agreement with Korean Kumho Tire. According to the agreement, Blatco will be able to use Kumho technologies under license for 20 years, primarily in the passenger car tire segment.
In October 2023, the Saudi Arabian Public Investment Fund (PIF) signed an agreement to build a tire plant with Pirelli. It is expected that $550 million will be invested in the new enterprise, in which PIF will have a 75% stake, and its opening is planned for 2026. In addition, in May 2023, it was announced that the Saudi company Kingdom Tyres intended to launch tire production in Saudi Arabia and planned to cooperate with one of the Indonesian companies.
Golden Star Rubber is engaged in the supply of natural rubber to customers around the world. The company is based in Bang Pla (Samut Prakan Province, Thailand).
Photo: Al Arabiya.