Tobacco majors spent billions on R&D of reduced-risk alternatives to smoking since 2008, says exec

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Updated 03 August 2022
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Tobacco majors spent billions on R&D of reduced-risk alternatives to smoking since 2008, says exec

  • Experts share views on how it is essential to rely on evidence when making decisions

DUBAI: British American Tobacco and Philip Morris International invested billions in the research and development of reduced-risk alternatives to smoking

Since 2018, BAT invested over $1.4 billion in R&D to develop innovative new category products, according to Hugo Tan, the company’s regional head of scientific engagement in the Asia-Pacific region and the Middle East.

What matters is not just to believe what people say, but to be guided by the evidence. Not just consumers but also public health experts and regulators often equate nicotine with cigarettes.

Hugo Tan, BAT’s regional head of scientific engagement in the Asia-Pacific and the Middle East.

Tan explained to Arab News that tobacco harm reduction is a strategy that recognizes the harmful effects of combustible cigarettes and encourages smokers to switch entirely to alternatives such as vaping and tobacco-heated products.

“It has been widely accepted and adopted by many countries, including the US, UK, Germany, France and others,” Tan said.

He added that the move is supported by its R&D center in Southampton and 1,500 specialists, who have contributed to publishing more than 130 peer-reviewed scientific studies on its new category products.

Since 2008, PMI has invested more than $9 billion in the R&D of smoke-free products.

Also, among PMI’s professionals are over 930 scientists, engineers and technicians committed to building scientific assessment capabilities, such as preclinical systems toxicology, clinical and behavioral research, and post-market assessment, according to the company’s website.

“In order to evaluate the reduced risk potential of our smoke-free products, we have developed a comprehensive scientific assessment program that is inspired by standard practices in the pharmaceutical industry and in line with the guidance provided by the US Food and Drug Administration for evaluation of modified risk tobacco products,” said Ignacio Gonzalez Suarez, head of scientific engagement Middle East and Africa, PMI.

He added: “Our program follows the international quality standards, such as Good Laboratory Practices and Good Clinical Practices and, since 2008, has resulted in over 400 peer-review scientific publications and book chapters showcasing our data and methods.”
 

Myths about nicotine

Tan clarified many myths about nicotine and explained how it is essential to rely on evidence when making decisions.

“What matters is not just to believe what people say, but to be guided by the evidence,” he continued.

Not just consumers but also public health experts like him and regulators often equate nicotine with cigarettes, Tan added.

Evidence has shown, however, that it is primarily the smoke from tobacco combustion and not nicotine that causes most of the health risks associated with cigarettes. Nicotine, he said, is only one of many chemicals found in cigarettes.

BAT has also completed a study, which is yet to be published, on a clinical trial on one of the new category products, Vuse. This study looks at both scenarios, the Vuse user and the cigarette user.

“It will provide a snapshot of the differences in biomarkers of potential harm between Vuse consumers compared to cigarette smokers, and from there, we can see if one indicator differs from the other in terms of biomarkers,” he said.

Tan said that in the UK, there are major health regulators and medical associations that have contributed to tobacco harm reduction strategies.

He cited the Public Health England report on e-cigarettes that said vaping was 95 percent safer than smoking combustible cigarettes.

Based on their clinical findings on the website, PMI also has found that using their tobacco heating system, such as IQOS, positively impacts smokers’ health.

“In the case of our tobacco heating system, we have conducted 12 preclinical studies and 10 clinical studies,” said Suarez. “The results show that there is no combustion and also the levels of toxicants are reduced, on average, by more than 90 percent compared with the smoke of a reference cigarette.”

He added: “Moreover, our clinical studies show that when adult smokers switch to the product, they reduce their exposure to toxicants compared to those that continue smoking and the level of reduction is similar – though not the same – as the reduction observed when quitting smoking.”

Despite the clinical findings of PMI and BAT’s research, Karem Harb, general practitioner and medical director at Dubai-based Hortman Clinics, said there are not enough studies on electronic cigarettes or coil-heated tobacco products.

Smokers do admit they feel better on e-cigarettes. That is because they contain less or zero amounts of tar. On the other hand, many e-cigarette smokers have reported an increase in palpitations and anxiety.

Karem Harb, Medical director and general practitioner at Dubai-basedHortman Clinics.

In his opinion, the new trend in e-cigarettes or similar products is that they have a higher concentration of nicotine when compared to regular cigarettes.

“Smokers do admit they feel better on e-cigarettes and breathe better, as well as sleep better, etc. and that is because they contain less or zero amounts of tar,” Harb said.

“On the other hand, many e-cigarette smokers have reported an increase in palpitations and anxiety, which could be directly related to the higher levels of nicotine compared to regular cigarettes,” Harb added.

Ways to accelerate alternatives

Furthermore, BAT proposes five ways to accelerate THR, Tan said.

The company encourages data collection to better understand the potential impact of electronic nicotine delivery products in the region.

He said this approach would improve consumer choice, quality and trust in the products.

Developing an appropriate regulatory system would be the second step in which science-based relative risks are differentiated and used to guide policies such as taxation, Tan added.

He explained that another way to ensure products can adapt to changing consumer preferences is to allow them to innovate.

Communication is essential for regulators and consumers to make informed decisions and support transparent industry-academic research collaboration to eliminate biased research.

Responsible marketing freedom, he concluded, enables consumers to move from combustible to non-combustible products faster. He said that BAT is committed to helping and working with local regulators to implement THR strategies.

According to PMI’s website, the FDA has approved marketing modified risk versions of IQOS Platform 1 devices and consumables as modified risk tobacco products.

PMI’s smoke-free products were available in 71 countries as of March 31, 2022.

It is stated on the website that the FDA found it appropriate to modify exposure orders for these products to promote public health.

As Harb concluded, although many claim to have quit cigarettes and taken up what would seem to be a healthier substitute, there is still a lot to learn about the new industry trends and the new age-group populations adopting the habit. “No smoking is always the better alternative,” he said.


Saudi Arabia’s MSMEs see 22.6% growth in credit facilities to $88bn: SAMA 

Updated 15 sec ago
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Saudi Arabia’s MSMEs see 22.6% growth in credit facilities to $88bn: SAMA 

RIYADH: Credit facilities extended to micro, small, and medium enterprises in Saudi Arabia grew by 22.6 percent year on year in the third quarter of 2024, totaling SR329.23 billion ($87.8 billion), according to official data. 

The Kingdom’s central bank, known as SAMA, revealed that 94.7 percent of these loans were provided by Saudi banks, while finance companies contributed 5.3 percent. 

MSME lending represented 9.1 percent of banks’ total loan portfolios and 18.8 percent of finance companies’ credit portfolios. 

The Saudi government has been actively encouraging financial institutions to allocate at least 20 percent of their loan portfolios to this critical sector, reflecting its strong and continued commitment to fostering business growth and economic diversification in line with Vision 2030. 

In the third quarter, medium-sized enterprises received the largest share of credit facilities, totalling 55 percent, or SR181.05 billion. 

Micro enterprises — those generating up to SR3 million in revenue with a workforce of no more than five employees — saw substantial growth, with credit increasing by 50.4 percent to SR36.14 billion, despite holding a smaller overall share. 

Credit to small enterprises, which made up 34 percent of MSME financing, rose by 30.4 percent to SR112.03 billion during the same period. 

The growth of SMEs in Saudi Arabia is driven by government-backed initiatives and Saudi Vision 2030’s ambitious reforms. 

Key programs include Kafalah for loan guarantees, Tamweel for connecting SMEs with financiers, and the Saudi Venture Capital Co. for startup investments. 

The Indirect Lending Initiative also enhances SME financing through intermediaries. 

Regulatory advancements, such as the 2015 Companies Law, NIDLP, and the National Center for Privatization, have improved the business environment.

Vision 2030 aims to boost SMEs’ GDP contribution to 35 percent by enhancing productivity, developing skills, improving infrastructure, and supporting sector diversification. 

Monsha’at key figures 

The Small and Medium Enterprises General Authority, also known as Monsha’at, drives SME growth by improving access to financing through collaborations with financial institutions and initiatives including the Kafalah Program, which is designed to boost lending. 

Monsha’at also champions entrepreneurship, supports business development with specialized training programs, and advocates for regulatory enhancements to create a more business-friendly environment. 

According to its third-quarter report, Saudi Arabia saw a significant surge in commercial registrations, which grew by 62 percent year on year to 135,909, with 46.8 percent attributed to female-owned businesses. 

This momentum points to MSMEs’ growing role as engines of innovation, job creation, and economic diversification, strengthening the foundation for sustainable, long-term growth. 

It highlights increasing entrepreneurial activity and business confidence, with more diverse participation across industries. 

The rise in female-owned businesses, in particular, reflects the success of government initiatives aimed at empowering women and fostering inclusivity in the economy, a core objective of Vision 2030. 

Regionally, Riyadh led with 39 percent of new commercial registrations, totaling 53,150, followed by Makkah with 18 percent, or 24,782, and the Eastern Province with 15 percent, amounting to 19,841. 


New expansion increases Riyadh airport’s capacity to 7m passengers

Updated 18 min 18 sec ago
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New expansion increases Riyadh airport’s capacity to 7m passengers

RIYADH: The first phase of the Terminal 1 expansion at King Khalid International Airport in Riyadh was inaugurated on Jan. 8, enhancing the airport’s capacity to accommodate up to 7 million passengers per year.

The ceremony was attended by Saudi Arabia’s Minister of Transport and Logistics Services Saleh Al-Jasser, who also serves as chairman of the General Authority of Civil Aviation.

Saudi Arabia’s aviation sector has experienced significant growth, marked by record passenger numbers, an expanding fleet, and new international partnerships—all aligning with the country’s Vision 2030 objectives.

King Khalid International Airport, in particular, has remained the top airport in the Kingdom for several months in 2024, achieving the highest compliance and operational standards. The expansion of Terminal 1 follows the completion of Terminals 3 and 4 in November 2022.

In his remarks, Al-Jasser emphasized that the phased expansion will increase Terminal 1’s annual passenger capacity from 3 million to 7 million. This development is part of a broader initiative to enhance both Terminals 1 and 2, contributing to Saudi Arabia’s Vision 2030 goals to strengthen the nation’s transportation infrastructure, improve the passenger experience, and stimulate economic growth through enhanced air connectivity.

“This expansion not only boosts the terminal’s operational capacity but also reinforces Riyadh’s role as a global hub for international travel and trade,” Al-Jasser said.

He further noted that the project would bolster tourism and economic activity while optimizing the overall passenger experience.

The newly expanded Terminal 1 features a host of modern amenities, including 38 check-in counters, 10 self-service kiosks, 26 passport control counters, and 10 automated gates. In addition, the terminal offers 24 boarding gates and 40 passport control counters in the arrivals area, complemented by 11 self-service gates designed to streamline passenger flow.

When combined with the upcoming enhancements to Terminal 2, the total capacity of both terminals is expected to reach 14 million passengers annually.

The expansion also includes upgrades to commercial spaces, air circulation systems, energy efficiency measures, and enhanced safety protocols.

Al-Jasser also highlighted the transformative potential of the recently unveiled master plan for King Salman International Airport.

The plan aims to position Riyadh as a premier global destination for events, while further establishing the city as a key player in international travel and commerce.

Ayman Abu Abah, CEO of Riyadh Airports Co., opened the ceremony by underscoring the importance of Terminal 1’s expansion. He reiterated that the project aligns with global operational standards and strengthens Saudi Arabia’s position as a vital air transport link between continents.

The inauguration event was attended by several prominent figures, including the President of GACA and the CEO of Airports Holding Company.

This expansion marks a significant milestone in Saudi Arabia’s ambitious efforts to build world-class transportation infrastructure, in line with the National Transport and Logistics Strategy outlined in Vision 2030.


Banking sector in Kuwait, Qatar and UAE to stay stable in 2025: S&P Global 

Updated 57 min 33 sec ago
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Banking sector in Kuwait, Qatar and UAE to stay stable in 2025: S&P Global 

RIYADH: Banks in Kuwait, Qatar, and the UAE are expected to maintain stability in 2025, supported by strong capital buffers, favorable economic conditions, and supportive government policies, according to a new analysis. 

In Kuwait, S&P Global forecasts improved asset quality, driven by a stronger economy and lower interest rates. 

The banking sector is well-positioned to deal with potential geopolitical stress in the region, with stronger lending growth offsetting the negative impact of lower interest rates on profitability, it added.  

S&P Global’s analysis echoes the views shared by Fitch Ratings in November 2024, which stated that the standalone credit profiles of Islamic banks in Kuwait are expected to remain stable in 2025, supported by favorable operating conditions. 

“After an estimated 2.3 percent contraction in 2024, we expect Kuwait’s GDP growth will rebound to 3 percent in 2025 as OPEC+ oil production restrictions are gradually eased, and project implementation and reform momentum improves,” said Puneet Tuli, S&P Global Ratings credit analyst.   

The report added that accelerated reforms following last year’s political changes could improve the pace of reform and growth prospects for the economy, “which in turn would support higher lending growth for the banking system.”  

According to the report, the credit losses in the Kuwaiti banking sector are approaching cyclical lows. 

S&P Global added that banks are likely to resort to write-offs to limit the rise in the nonperforming loan ratio, supported by strong provisioning buffers. 

The analysis further noted that banks in Kuwait operate with robust capital buffers and typically retain 50 percent or more of their profits, which supports their capitalization. 

The US-based agency also highlighted that Kuwaiti banks’ funding structures benefit from a solid core customer deposit base and a net external asset position. 

“Deposits from government and public institutions have experienced some volatility in the past, as these entities seek to diversify their deposits among local and foreign banks. However, we believe that government support to systemically important banks will be forthcoming if needed,” said S&P Global.  

It added: “Private sector deposits from corporations and households have been stable and dominate Kuwaiti banks’ funding base.”   

Qatar’s outlook 

In Qatar, S&P Global expects continued strong performance for banks in 2025, driven by strong capitalization and ample liquidity. The rise in liquefied natural gas production, along with its impact on the non-hydrocarbon economy, is expected to support credit growth in the next two to three years. 

The report added that local funding sources will play an increasing role in supporting credit growth among Qatari banks, driven by slower public sector deleveraging. 

S&P Global also noted that the Qatari government’s strong support for its banking sector is expected to mitigate the risk of external debt outflows in the event of escalating geopolitical risks. 

“Geopolitical tensions in the Middle East are high but we currently do not expect a full-scale regional conflict, and we anticipate macroeconomic conditions in Qatar will remain broadly stable,” said S&P Global Ratings credit analyst Juili Pargaonkar.  

Forecast for the UAE

In the UAE, S&P Global forecasts improved asset quality metrics and lower credit losses in 2025, driven by a robust domestic economy.  

The agency expects banks in the emirates to maintain strong capital buffers, robust funding profiles, and continued government support in 2025, which will underpin their resilience. 

The analysis also noted that banks in the UAE have experienced a significant increase in deposits over the past three years, which will help sustain their strong growth momentum in 2025. 

“Deposit growth has improved in recent years as private corporations and retail depositors prioritized saving over spending, and higher interest rates provided better yields on deposits,” said S&P Global.   

It added: “We expect strong deposit growth to continue through 2025, given the non-oil economy remains supportive, leading to stronger cash flow generation from corporations.” 


Saudi domestic tourism driving travel sector growth, Almosafer CEO says

Updated 09 January 2025
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Saudi domestic tourism driving travel sector growth, Almosafer CEO says

RIYADH: Saudi Arabia’s domestic tourism is fueling a significant expansion in the Kingdom’s travel sector, with domestic bookings now making up over 40 percent of Almosafer’s overall travel market, according to CEO Muzzammil Ahussain. 

This growth is underscored by a 45 percent year-on-year increase in domestic flight bookings in 2024, alongside a 39 percent rise in room night bookings, according to Almosafer’s latest travel trend report, released during the third Saudi Tourism Forum held in Riyadh. 

The surge is linked to the country’s expanding tourism offerings and enhanced connectivity through low-cost carriers, with family and group travel seeing a particular boost, rising over 70 percent, the report added.

“The country has invested heavily in creating offerings and events to support domestic tourism,” Ahussain told Arab News on the sidelines of the event. “We see continued strength and sustainability in this, so we remain focused on domestic tourism.”

Almosafer, a Saudi travel company and part of Seera Group, is benefiting from this trend as domestic tourism becomes more sustainable. “In the report, over 40 percent of all of our bookings are now domestic,” Ahussain explained. “That doesn’t mean international travel is slowing down; overall travel is growing.”

He said flight prices dropped 7 percent year on year, prompting higher spending in destinations. “People are spending more on hotels, staying longer, and spending on experiences and events,” Ahussain said. “So overall, total spend is increasing.”

Despite the growth, challenges remain. Almosafer CEO said that the limited hotel supply during peak times, such as Riyadh season, leads to higher rates and makes it difficult for travelers to find accommodations. 

“We’ve already seen a number of initiatives to improve hotel capacity and rooms across the country,” Ahussain said, adding that such improvements would make domestic tourism more attractive at all levels, from luxury to economy. 

The company’s ongoing efforts to enhance partnerships with regional authorities and airlines are also key to this growth, and Almosafer said it collaborates closely with the Saudi Tourism Authority and regional bodies like the Aseer Investment Authority.

“We’ve had a number of signings at the Saudi Tourism Forum with different authorities from around the country to promote and market key destinations,” he added.

Ahussain also highlighted the strong partnerships Almosafer has with low-cost carriers like flynas and flyadeal, as well as its new partnership with Riyadh Air, which is set to launch later in 2025.

Looking ahead, Ahussain is optimistic about the impact of global events, such as Expo 2030 and the 2034 FIFA World Cup, on the Kingdom’s tourism sector. “These projects and events, as we saw with Expo 2020 Dubai, help build a brand for a city or country, and that brand creates awareness,” Ahussain said.

He continued: “When people come, whether domestically or internationally, we are working to build a foundation that supports them throughout their travel — before, during, and after these events.”

Almosafer is also preparing for an initial public offering as part of its long-term strategy, with a target IPO date in 2025 or 2026.

“In November 2023, Seera Group announced that Almosafer would be targeted for an IPO in two to three years,” he said. 

“We’re still on track with that plan and working toward it.”

With domestic tourism growing rapidly, Almosafer is enhancing its digital offerings through partnerships aimed at streamlining travel services. 

During the forum, Almosafer signed a memorandum of understanding with the Saudi Tourism Authority to integrate digital platforms, enhancing access to travel services. 

Ahussain explained that the partnership also aimed to improve Sara Al, the smart guide for Saudi tourism, by adding booking services for flights and accommodations.


Egypt’s inflation drops to 23.4% in December amid falling food prices

Updated 09 January 2025
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Egypt’s inflation drops to 23.4% in December amid falling food prices

  • Banking sector shows strong resilience with record capital adequacy

RIYADH: Egypt’s annual inflation rate slowed to 23.4 percent in December 2024, down from 25 percent in November, according to figures from the Central Agency for Public Mobilization and Statistics.

The consumer price index for the country stood at 239.7 points in December, reflecting a deceleration largely driven by a drop in food prices.

Key food categories saw notable price decreases, with vegetables falling by 14 percent, dairy products, cheese, and eggs decreasing by 0.7 percent, fish and seafood dropping by 0.6 percent, and meat and poultry experiencing a slight reduction of 0.1 percent.

However, other sectors showed price increases, putting upward pressure on the overall inflation rate.

For example, telephone and fax services surged by 11 percent, fruit prices rose by 7.5 percent, and medical products, devices, and equipment saw a 5.5 percent increase.

Other notable price hikes included postal services (up 3.6 percent), hotel services (up 3.2 percent), and recreational and cultural services (up 2.8 percent).

Meanwhile, costs for telephone and fax equipment grew by 2.6 percent, while actual housing rentals increased by 1.6 percent. Hospital services saw a rise of 1.4 percent, with furniture, carpets, and floor coverings up by 1.3 percent.

Smaller price increases were recorded in oils and fats, electricity, gas, and fuel materials (up 0.7 percent), transportation services (up 0.5 percent), and basic foodstuffs like grains and bread (up 0.3 percent). Sugar and sugary foods, as well as private transportation costs, also saw slight increases of 0.2 to 0.3 percent.

Banking sector

Egypt’s banking sector continues to demonstrate stability and resilience, playing a vital role in maintaining the country’s economic, financial, and monetary stability, according to the Central Bank of Egypt’s latest Financial Soundness Indicators.

The sector’s capital adequacy ratio reached 19.1 percent by the end of Q3 2024, comfortably surpassing the regulatory minimum of 12.5 percent. This marks a 0.5 percent improvement from the previous period, highlighting the sector’s growing financial health.

In terms of asset quality, nonperforming loans represented just 2.4 percent of total loans, with provisions coverage for these loans standing at a strong 87.4 percent.

Liquidity levels remained robust, with local currency liquidity at 32.1 percent and foreign currency liquidity at 77.7 percent, well above the regulatory requirements of 20 percent and 25 percent, respectively.

The banking sector’s loan-to-deposit ratio was recorded at 61.3 percent by the end of Q3 2024, reflecting conservative lending practices. Meanwhile, profit margins remained impressive, with a return on equity of 32.2 percent for the 2023 fiscal year.