RIYADH: A $550 million tire factory is set to be built in Saudi Arabia after the Kingdom’s Public Investment Fund entered into a joint venture with Italy’s Pirelli.
According to a press statement, PIF will hold a 75 percent stake in the new JV, while the Milan-based firm will own the remaining 25 percent.
The statement added that Pirelli, one of the world’s most prominent tire manufacturers, will also act as a strategic technology partner in the new facility to support the project’s development by providing technical and commercial assistance.
The new plant is expected to be operational by 2026, and it will manufacture tires for passenger vehicles under the Pirelli brand.
The facility will also manufacture and market tires under a new local brand targeting the domestic and regional markets.
“Through this joint venture with Pirelli, PIF is building production capabilities in the automotive and mobility value chain and enhancing opportunities for private sector contribution,” said Yazeed Al-Humied, deputy governor and head of the Middle East and North Africa Investments at PIF.
Through this JV, the fund is eyeing to localize manufacturing capabilities for an essential segment in the automotive industry while enabling upstream and downstream activities across the value chain.
PIF added that the plant is expected to generate an annual production capacity of 3.5 million tire units.
“Accessing local production in Saudi Arabia, one of the most promising markets today, in line with our positioning in high Value and electric, represents a great opportunity,” said Marco Tronchetti Provera, executive vice president of Pirelli.
The closing of the transaction is subject to obtaining approvals from the relevant authorities and satisfying certain conditions under the agreement.
PIF, widely touted to be the vibrant economic engine of Saudi Arabia, is currently on a path of economic diversification. It has steadily invested in the automotive sector over the past few years.
In October, PIF launched Tasaru, a company dedicated to developing local supply chain capabilities for the automotive and mobility industry in Saudi Arabia.
The fund has also made significant investments in the future mobility sector by establishing Saudi Arabia’s first national electric vehicle brand, Ceer, in partnership with Foxconn and investing in US-based Lucid Motors.
Program to enhance portfolio management skills
The fund also launched a new program to enhance the skills of portfolio managers in the Kingdom’s capital market.
According to a statement, this new initiative based in Riyadh will upskill portfolio managers in investment strategies and risk management techniques.
The official launch of this program will happen in the first quarter of 2024.
The program is open to all Saudi nationals with a minimum of three years of experience in portfolio management and fluency in English.
It’s free of cost and interested candidates can visit the fund’s website to access the application form.
