PIF-owned company aims to stub out smoking in Saudi

Reuters/Fahad Shadeed

• Initiative hopes to save $1.6bn on healthcare costs
• Sales of cigarettes in kingdom will reach $10bn this year
• Smoking in public places was banned in Saudi Arabia in 2019

Saudi Arabia’s Public Investment Fund (PIF) has launched a company that aims to cut smoking in the kingdom by a quarter by 2032.

Badael will develop, manufacture and distribute tobacco-free alternatives which will help an estimated one million people make the switch from smoking, according to a statement.

The initiative has the potential to save more than SAR6 billion ($1.6 billion) on healthcare expenditure.

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“Badael aims to address the negative impact that smoking has on the wellbeing of the Saudi population,” the statement said.

It added that manufacturing, sourcing raw materials, knowledge transfer and the development of intellectual property will all be sourced locally.

“Badael’s vision is to curb smoking and deliver on PIF’s strategy to improve the quality of life for all. It is part of Saudi Arabia’s broader efforts to diversify the economy, localise manufacturing and drive economic transformation as well as job creation.”

Sales of tobacco products are expected to reach $10.42 billion in the kingdom this year, according to Statista, with annual growth of 7.22 percent forecast through to 2027.

Cigarettes make up the largest segment, with a predicted market volume of $10.24 billion this year.

Saudi Arabia banned smoking in public places such as restaurants and public transport in 2019.

The kingdom has a tax on tobacco products and previously raised the price of shisha by 100 percent, while the sale of tobacco products to those under the age of 18 is banned.

There is also a 100 percent tax on electronic smoking products and the liquids used in them.