Establishing new production plant in Eastern Province

KSA tire, one of the leading tire manufacturer in Saudi Arabia, is expanding its manufacturing footprint in the country with the establishment of a new production plant in Dammam, Eastern Province. The new factory will be built on 50,000 square meters of land that the company recently acquired and will start production by 2023.

Background of KSA tire

Founded in 1990 in Riyadh, KSA Tiring began as a small tires distribution company catering to the demand of local automobile sector. Within few years, the company analyzed the need for local manufacturing of tires in Saudi market and took the strategic decision to set up its first production plant in Riyadh in 1995. Starting with basic passenger car tires, the factory gradually expanded product lines to include light truck tires and off-road tires used in construction and mining industries. Over the years, multiple expansions were carried out in terms of plant area and capacities to meet the growing market demand. Today, the Riyadh factory produces over 5 million tires annually across different segments.

Rationale behind new plant

The management of KSA tiring recognized the tremendous industrial growth happening in Eastern Province majorly led by oil & gas sector, petrochemical industry and economic cities development. This resulted in surging demand of tires from companies operating heavy machineries, earthmoving equipment, cargo trucks, buses etc. However, the long distance from Riyadh plant was becoming a hindrance in addressing the requirements of eastern region customers on timely basis. This provided the rationale to set up a dedicated manufacturing base closer to the upcountry markets. The new Dammam factory will specifically focus on off-road, mining, industrial and OTR tires needed for construction applications.

Investment details and plant specifications

As per the company officials, total investment of SAR 650 million will be made in three phases towards establishing the Dammam plant. In the initial stage, an amount of SAR 300 million will be utilized to develop manufacturing facilities for off-road tires ranging from 12 inches to 29 inches along with curing presses and various mixing equipment. The covered production area will be of 25,000 sqm equipped with state-of-the-art German machinery. Around 150 direct jobs are expected to be generated once the plant commences full operation by mid-2023. Further expansions are planned in subsequent phases to addmore tire sizes and product categories based on market evaluations.

Key factors favoring Dammam location

Apart from addressing the demand pool in eastern region comprising major industrial cities including Dammam, Al-Khobar, Jubail etc., the Dammam plant site offers few geographical and logistical advantages. It is strategically located near the industrial estates housing construction and mining behemoths which are the major B2B customers. This will help minimize transportation costs and ensure timebound deliveries. The accessibility to King Fahd Industrial Port in Dammam also provides seamless connectivity for important raw material imports. Abundant land availability and relatively lower real estate rates compared to other cities like Riyadh made the location commercially viable as well. The supportive investment environment and infrastructure push by Saudi government's Vision 2030 further strengthened the case for this greenfield investment.

Support from local authorities

KSA tiring received strong backing from Dammam municipal authorities and Saudi Industrial Property Authority (MODON) during the land acquisition process. Appreciating the economic impact of such a major manufacturing project, MODON offered attractive financing solutions and tax rebates as incentives. The CEO of KSA tiring lauded these initiatives highlighting "Government's pro-investment policies are greatly helping domestic industries to expand locally and reduce dependence on imports. We are confident that Dammam plant will emerge as a role model for import substitution and create new local job opportunities in line with Saudi Vision 2030 goals."

Product certification and quality commitment

All tires rolled out from the new Dammam factory will undergo stringent quality checks at the in-house testing laboratory to ensure compliance with international standards. The plant will seek approvals and certifications from various global agencies including European Union, U.S. Department of Transportation etc. Adhering to global manufacturing best practices, KSA tiring has deployed advanced quality management systems and deployed quality experts across all stages from raw material receiving to finished goods dispatch. Customers can rest assured about the consistent high quality despite geographic expansion says company's VP of manufacturing.

Through the ambitious Dammam expansion, KSA tiring aims to enhance self-sufficiency in industrial tires segment and localize heavy-weight tire industry in line with 'Made in Saudi Arabia' vision. Along with addressing rapid growth in eastern province, the strategic investment will enable company to boost export potential to GCC and African markets in future. Once fully operational, the plant will be a milestone in the development of localized automotive ancillary sector under the Kingdom's industrial diversification blueprint.

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