HPDC Signs Investment Agreement with Believe for Halal Cosmetics

Halal Products Development Company (HPDC) has signed a binding investment agreement with Believe, a specialized halal cosmetics and personal care company, marking a significant step toward strengthening the halal industry ecosystem in the Kingdom of Saudi Arabia. The announcement, made on May 29, 2024, underscores HPDC’s commitment to providing high-quality products that comply with Islamic standards both locally and globally.

Context and Background

The investment is part of Saudi Arabia’s broader strategy to diversify its economy and position itself as a global hub for halal products. HPDC, a key player in the halal sector, aims to enhance the entire value chain by fostering innovation, localizing production, and supporting small and medium-sized enterprises. The global cosmetics and personal care industry was valued at approximately $352 billion in 2022, with the halal segment accounting for about $70 billion. This sector is expected to grow at rates exceeding historical industry averages, making it a strategic area for investment.

Key Details

Under the agreement, Believe will relocate its headquarters from Singapore to Saudi Arabia, establishing the Kingdom as a central hub for exporting its products worldwide. The investment will also involve setting up a factory in Saudi Arabia that meets the highest global standards. This facility will manufacture Believe’s owned brands and provide contract manufacturing services for local brands initially, with plans to extend to global brands. Additionally, the initiative aims to transfer research and development capabilities, empowering local companies, especially SMEs, by offering advanced formulas, product and brand design, raw material sourcing, manufacturing, and packaging services.

HPDC CEO Fahad Al Nuhait commented, “Our investment in this sector marks a very important initial step that acts as a key catalyst for the development and localization of halal cosmetics and personal care manufacturing, enhancing the sector’s efficiency and supporting research and development efforts to elevate services provided locally and globally.” He added that the partnership with Believe represents a strategic opportunity to localize and transfer expertise to Saudi Arabia and provide high-quality products to consumers worldwide, while also contributing to Vision 2030 by creating employment opportunities.

Ankit Mahajan, CEO of Believe, stated, “This partnership represents a strategic opportunity for us to expand our scope, establish manufacturing capabilities, and offer high-quality halal cosmetics and personal care products that align with Islamic standards. Having Halal Products Development Company as a strategic investor enhances our ability to achieve our goals in the region and globally, and our decision to relocate our headquarters is in response to the Kingdom’s pivotal position in the Islamic world.”

Implications and Impact

The investment is expected to have far-reaching implications for the halal industry, both in Saudi Arabia and globally. By localizing production, the Kingdom will reduce its reliance on imports and become a net exporter of halal cosmetics. This move also aligns with the Saudi Vision 2030 goal of increasing non-oil exports and fostering a knowledge-based economy. The transfer of research and development capabilities will help build a skilled workforce and encourage innovation, while the empowerment of SMEs will stimulate entrepreneurship and diversify the economic base.

Furthermore, the relocation of Believe’s headquarters to Saudi Arabia strengthens the Kingdom’s position as a global Islamic business hub, attracting other halal-focused companies and investments. This development is particularly timely as the halal cosmetics market continues to expand, driven by rising demand from Muslim consumers worldwide.

Vision 2030 Alignment

This investment directly supports the objectives of Saudi Vision 2030, particularly in the areas of economic diversification, local content development, and job creation. By building a robust halal cosmetics manufacturing sector, the Kingdom is not only enhancing its self-sufficiency but also establishing itself as a leader in the global halal economy. The partnership between HPDC and Believe serves as a model for future investments, demonstrating the potential for international companies to thrive in Saudi Arabia while contributing to the realization of the Kingdom’s ambitious long-term goals.

20 Questions

Q1. What is the main purpose of the investment agreement between HPDC and Believe?

A1. The main purpose is to enhance the halal industry ecosystem in Saudi Arabia by investing in Believe, a company specialized in halal cosmetics and personal care. This investment aims to localize production, transfer expertise, and provide high-quality products compliant with Islamic standards, supporting the Kingdom’s strategic goals.

Q2. What is Believe’s specialization?

A2. Believe specializes in halal cosmetics and personal care products, ensuring they adhere to Islamic standards. The company focuses on providing high-quality items that meet the needs of Muslim consumers worldwide, with a strong emphasis on compliance and innovation.

Q3. Where will Believe relocate its headquarters?

A3. Believe will relocate its headquarters from Singapore to the Kingdom of Saudi Arabia. This move positions Saudi Arabia as a central hub for the company’s global exports, leveraging the Kingdom’s strategic location and its significance in the Islamic world.

Q4. What will be established in Saudi Arabia as part of the agreement?

A4. A factory will be established in Saudi Arabia that complies with the highest global standards. This facility will manufacture Believe’s owned brands and also provide contract manufacturing services for local brands initially, with plans to extend to global brands in the future.

Q5. What services will the factory provide initially?

A5. Initially, the factory will provide contract manufacturing services for local brands, offering advanced formulas, product design, sourcing of raw materials, manufacturing, and packaging. Later, these services will be extended to global brands, enhancing the Kingdom’s manufacturing capabilities.

Q6. Who is the CEO of HPDC?

A6. The CEO of Halal Products Development Company is Fahad Al Nuhait. He leads the company’s efforts to enhance the halal industry ecosystem in Saudi Arabia, focusing on investment and localization to support Vision 2030.

Q7. Who is the CEO of Believe?

A7. The CEO of Believe is Ankit Mahajan. He oversees the company’s operations and strategic direction, with a focus on expanding into new markets and ensuring halal compliance for all products.

Q8. What did Fahad Al Nuhait say about the investment?

A8. Fahad Al Nuhait stated that the investment marks a very important initial step that acts as a key catalyst for the development and localization of halal cosmetics and personal care manufacturing. He emphasized that it enhances sector efficiency and supports research and development efforts locally and globally.

Q9. What did Ankit Mahajan say about the partnership?

A9. Ankit Mahajan said the partnership represents a strategic opportunity to expand their scope and establish manufacturing capabilities. He highlighted that having HPDC as a strategic investor enhances their ability to achieve goals in the region and globally, and the relocation of headquarters responds to Saudi Arabia’s pivotal position in the Islamic world.

Q10. What was the global cosmetics and personal care industry value in 2022?

A10. The global cosmetics and personal care industry reached approximately $352 billion in 2022. This figure reflects the vast market for beauty and personal care products, with significant growth potential in specialized segments like halal products.

Q11. What is the estimated value of the halal cosmetics segment?

A11. The halal cosmetics and personal care segment accounted for about $70 billion of the global market in 2022. This indicates a substantial consumer base for halal-compliant products, driven by the growing Muslim population and increasing awareness.

Q12. How is the halal segment expected to grow?

A12. The halal segment is expected to grow at rates exceeding historical industry growth rates. This suggests a strong upward trajectory, making it an attractive investment area for companies looking to capitalize on rising demand.

Q13. How does this investment support SMEs?

A13. The investment empowers local SMEs by providing value-added services such as advanced and innovative formulas, product and brand design, sourcing appropriate raw materials, manufacturing and packaging. These services enable SMEs to compete effectively and build high-quality Saudi brands for global markets.

Q14. What is the significance of relocating Believe’s headquarters to Saudi Arabia?

A14. Relocating Believe’s headquarters to Saudi Arabia makes the Kingdom a central hub for exporting the company’s products worldwide. It also strengthens Saudi Arabia’s position as a leading Islamic business hub, attracting other halal-focused enterprises and investments.

Q15. How does this investment align with Vision 2030?

A15. This investment aligns with Vision 2030 by supporting economic diversification, increasing local content, and creating employment opportunities. It contributes to the Kingdom’s goal of building a sustainable and knowledge-based economy.

Q16. What are some of the value-added services mentioned?

A16. Value-added services include advanced and innovative formulas, product and brand design, sourcing appropriate raw materials, manufacturing and packaging. Additionally, the investment aims to build high-quality Saudi brands and export them to global markets, enhancing the local industry.

Q17. What is the role of HPDC in the halal industry?

A17. HPDC plays a pivotal role in the halal industry by investing in and developing halal products, supporting local companies, and fostering innovation. The company works to enhance the entire halal ecosystem, aligning with Saudi Arabia’s strategic objectives.

Q18. What is the strategic importance of Saudi Arabia’s position in the Islamic world?

A18. Saudi Arabia’s pivotal position in the Islamic world makes it a natural hub for halal products. This strategic importance attracts companies like Believe to relocate operations, leveraging the Kingdom’s religious significance and market access.

Q19. What are the expected benefits for local brands?

A19. Local brands will benefit from contract manufacturing, access to advanced formulas, design support, and raw material sourcing. These services will help them improve product quality, reduce costs, and potentially expand into international markets.

Q20. How does this investment contribute to job creation?

A20. The establishment of a factory and the relocation of headquarters will create direct and indirect employment opportunities for Saudi nationals. This supports Vision 2030’s goal of increasing workforce participation and providing quality jobs.

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