Riyadh - Sharikat Mubasher: The Saudi Public Investment Fund (PIF) concluded a joint venture (JV) agreement with Pirelli, the global tire manufacturer, to establish a tire manufacturing facility in the Kingdom with investment worth $550 million, the sovereign fund announced in a statement.
The agreement was signed during the seventh edition of the Future Investment Initiative (FII7).
PIF will own a 75% stake in the new JV, while the remaining 25% stake will be owned by Pirelli, which will act as the strategic partner.
As per the agreement, Pirelli will foster the project’s development through offering the necessary technical and commercial assistance.
The joint facility, scheduled to start operation in 2026, will manufacture high-quality tires for passenger vehicles, under the Pirelli brand. In addition, it will manufacture and market tires under a new local brand targeting the domestic and regional market.
It is expected to operate with an annual production capacity of 3.5 million units.
The establishment of the new JV facility is expected to attract more investments to the automotive sector, driven by the Kingdom’s ambition to become a global automotive manufacturing hub by 2030.
Yazeed Al-Humied, Deputy Governor and Head of MENA Investments at PIF, stated that the JV will enable the fund to build production capabilities in the automotive and mobility value chain, and enhance opportunities for private sector contribution.
“This collaboration marks another pivotal milestone in our journey to diversify the economy, enhance sustainability and localize manufacturing capabilities in Saudi Arabia.” Al-Humied said.
Meanwhile, Executive Vice Chairman of Pirelli, Marco Tronchetti Provera, stated: “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 for Pirelli.”
It is worth noting that Bandar Al-Khorayef, Minister of Industry, revealed the Kingdom’s plan to establish a tire manufacturing facility jointly with one of the global tire giants, yesterday, without sharing further details.
