Algeria has launched construction of a 207-million-dollar tyre manufacturing plant as it steps up efforts to strengthen local production and reduce dependence on imports after shortages hit the market earlier this year, the country’s investment promotion agency said.
The factory, with an annual capacity of five million tyres, is being built in Touggourt, in northeastern Algeria, and forms part of a broader push by the authorities to develop domestic industry and enhance what they describe as “industrial sovereignty”.
The Algerian Agency for Investment Promotion (AAPI) said construction officially began on Monday, December 29, on the project, which represents an investment of 27 billion dinars (US$207 million).
According to the agency, the plant will be developed in phases. The first phase will focus on the production of two million tyres a year for heavy vehicles, including trucks and buses. A second phase will add capacity for three million passenger-car tyres annually.
Officials have presented the project as a strategic investment aimed at securing supply for the domestic market and limiting exposure to fluctuations in international trade.
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Algeria relies heavily on imported tyres, a vulnerability that became evident in the second half of 2025, when shortages disrupted supply chains and pushed up prices for consumers and transport operators.
The shortages were attributed to tighter import controls, foreign exchange constraints and logistical delays, prompting authorities to introduce temporary measures to stabilise the market while longer-term industrial projects were developed.
As part of those measures, state fuel distributor Naftal signed an agreement in November with Germany’s Continental to import one million passenger-car tyres to ease pressure on supply. A separate deal was also announced with Italy’s Prometeon to supply tyres for heavy vehicles.
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The new Touggourt plant is intended to reduce the need for such stopgap solutions by building domestic manufacturing capacity.
It also aligns with the government’s wider policy of encouraging local production across sectors ranging from food and pharmaceuticals to automotive components, in order to curb imports and conserve foreign currency reserves.
In recent years, Algerian authorities have tightened import regulations while offering incentives to investors willing to establish local manufacturing operations, including access to land, tax breaks and simplified administrative procedures.
The tyre project in Touggourt is not the only initiative in the sector. In July, Algerian company El Hadj Arabi Industries announced a major partnership with China’s Doublestar Group to build another tyre factory in the country.
That project is expected to have an initial annual capacity of seven million tyres, with plans to expand to as many as 22 million units, underscoring the scale of Algeria’s ambitions to become a regional manufacturing hub for tyres.
Together, the two plants would significantly exceed current domestic demand, potentially opening the door to exports to neighbouring markets in North and West Africa.
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Africa’s tyre market is growing steadily, driven by population growth, urbanisation and an expanding vehicle fleet, particularly in the continent’s more economically stable countries.
According to estimates by market research firm Mordor Intelligence, the African tyre market was valued at about $7.10 billion in 2025 and is projected to reach $8.94 billion by 2030, representing an average annual growth rate of 4.72 percent.
Algeria accounted for roughly 26.75 percent of the African market in 2024, reflecting both the size of its domestic vehicle fleet and its role as a major importer of automotive products.
Despite growing demand, the African tyre market remains largely dependent on imports, mainly from China, Europe, the United States and India. Local production capacity is limited in many countries, leaving markets exposed to external supply shocks and currency fluctuations.
Algerian officials argue that expanding domestic manufacturing will not only improve supply security but also create jobs, develop industrial skills and stimulate related sectors such as rubber processing, logistics and maintenance.
The Touggourt project is expected to generate hundreds of direct jobs once operational, with additional employment created indirectly through supply chains and supporting services, according to officials.
For the government, the investment also carries symbolic weight, signalling a renewed emphasis on industrial development after years of reliance on hydrocarbons to drive economic growth.
While oil and gas remain central to Algeria’s economy, authorities have repeatedly stressed the need to diversify and build a stronger manufacturing base capable of meeting domestic needs and competing regionally.
If completed on schedule, the Touggourt tyre plant would mark a significant step in that direction, turning a sector once dominated by imports into a pillar of Algeria’s industrial strategy.
