Saudi Arabia's sovereign wealth fund, the Public Investment Fund, has established Badael, a company which aims to develop, manufacture and distribute tobacco-free products as part of efforts to reduce the prevalence of smoking and localise manufacturing in the kingdom.
Badael intends to make its tobacco-free nicotine delivery products available across Saudi Arabia by the end of 2023, with the aim of expanding its reach to regional and international markets in the longer term.
The company’s products will be manufactured in the kingdom, “ensuring the highest level of product quality and safety”, the PIF said on Wednesday.
Badael's products are expected to help nearly a million people switch from smoking by 2032, representing about a quarter of all smokers in Saudi Arabia, the PIF said.
This has the potential to “deliver direct annual savings” of more than 6 billion Saudi riyals ($1.6 billion) on healthcare expenditure by 2032, the fund said.
“The initiative is line with Saudi Arabia’s focus on improving the quality of life for its citizens, as part of Saudi Vision 2030,” the PIF said.
“Badael aims to address the negative impact that smoking has on the well-being of the Saudi population.”
Badael will also aim to deliver on the PIF’s localisation mandate by sourcing raw materials and supporting domestic manufacturing, knowledge transfers and the development of intellectual property.
The company will provide economic opportunities and create jobs, working in partnership with the local private sector and global partners, the PIF said.
One of the world’s largest sovereign wealth funds, the PIF is at the centre of the Saudi Vision 2030 initiative to diversify the kingdom’s economy away from hydrocarbons.
The total volume of the fund's assets under management amounted to more than 2 trillion riyals and it aims to double that by 2025, PIF governor Yasir Al Rumayyan said this month.
The PIF has been instrumental in creating more than 500,000 direct and indirect jobs and “intends to create 1.8 million direct and indirect jobs” by 2025, Mr Al Rumayyan said.
It also intends to inject up to 1 trillion riyals into new projects in Saudi Arabia and “will continue its efforts to diversify the economy, support local content, develop innovative opportunities for the future and contribute to creating an attractive environment for investments”, he said.
The fund is investing heavily to build new projects in the kingdom. It is mandated to pump $40 billion to $50 billion into the local economy to generate jobs and boost the non-oil economic base of the country.
Since 2017, the PIF has established 77 companies in the kingdom.
“Badael’s vision is to curb smoking and deliver on [the] PIF’s strategy to improve the quality of life for all, and is part of Saudi Arabia’s broader efforts to diversify the economy, localise manufacturing and drive economic transformation, as well as job creation,” the PIF said.