South Korean tyre manufacturer Khumo Tire Company has finally signed off on a technology licensing agreement with Saudi Arabia's Black Arrow Tire Company (Blatco) allowing its local franchise to produce and sell its tyres across the Middle East for 20 years, according to local reports.

The two companies had originally signed a memorandum of understanding (MoU) to establish the joint venture in January 2022, followed by two years of due diligence and planning.

Blatco was scheduled to begin construction of its first tyre plant, in Yanbu, in the second quarter of 2024. With the support of the Saudi Arabian government’s Vision 2030 policy, Blatco plans to invest US$1.5bn to build a factory capable of producing 15m passenger and commercial vehicle tyres per year. Construction of the 280,000 sq m plant should be completed in 2027.

Kumho is South Korea’s second largest tyre manufacturer after Hankook with global capacity for 63m a year.