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Saudi Arabia's Public Investment Fund (PIF) has signed a joint venture (JV) agreement with Pirelli Tyre S.P.A to build a $550 million manufacturing plant in the kingdom.
PIF will hold a 75% stake in the new JV with Pirelli holding the remaining 25% and acting as a strategic technology partner to support the development of the project, the sovereign wealth fund (SWF) said in statement on Thursday.
The state fund, which is building an international portfolio of investments while also investing locally in projects that will help reduce Saudi Arabia's reliance on oil, has assets under management of over $594 billion.
The tire plant is expected to start production in 2026. The JV will manufacture high-quality tires for passenger vehicles, under the Pirelli brand, and will also manufacture and market tires under a new local brand targeting the domestic and regional market.
The plant is expected to generate an annual production capacity of 3.5 million units.
As part of plans to make Saudi Arabia a global automotive manufacturing hub by 2030, PIF is setting up a world-class automobile sector in the kingdom.
The SWF's other recent initiatives are:
- PIF and Hyundai Motor Company announced a landmark $500 million JV to establish a state-of-the-art automotive manufacturing plant in Saudi Arabia.
- PIF launched Tasaru, the National Automotive and Mobility Investment Company, which is dedicated to localizing automotive supply chains and manufacturing capabilities.
- PIF and the Saudi Electricity Company launched an EV infrastructure company to set up 5,000 fast chargers across the kingdom by 2030.
- In September, PIF-backed luxury electric vehicle maker Lucid Group opened its first international manufacturing plant in Saudi Arabia, which is expected to produce 155,000 electric vehicles a year.
- In November last year, the PIF launched the kingdom's first electric vehicle brand, Ceer, which aims to attract more than $150 million in foreign direct investment.
(Writing by Brinda Darasha; editing by Seban Scaria)
