MANUFACTURING

FOREIGN INVESTORS LURED BY SAUDI INDUSTRIAL’S POTENTIAL

Saudi Arabia is boosting its industrial investment programme in the areas of sustainability, technology, industrial and energy services, and advanced materials.

In August, Saudi Aramco signed 22 memoranda of understanding and a joint venture deal as part of its Namaat programme.

“Aramco continues to be at the forefront of enabling and enhancing the kingdom’s industrial, technology and sustainability infrastructure through large-scale investments and key partnerships, such as IKTVA and, by extension, Namaat,” according to Aramco chairman Yasir Al-Rumayyan. “Such initiatives help further drive economic growth and diversification, ensure greater reliability of energy supply, effectively localise the industrial supply chain, and create better jobs and skillsets.”

The 22 new MoUs signed under the Namaat programme include:

• SOLVAY – an MoU with the goal to pursue the development of advanced non-metallic materials and localisation of a composite value chain;
• DHL Supply Chain - an arrangement to evaluate the feasibility of establishing a local industrial logistics and procurement hub serving Saudi Arabia and the MENA region;
• VEOLIA – exclusive MOU to confirm the commercial feasibility of establishing a world-class integrated waste management company, alongside a strategic IK stakeholder;
• Air Liquide, Haliburton and PIF; Baker Hughes and PIF; Linde, Schlumberger and PIF – three separate non-binding MoUs to evaluate carbon capture and sequestration (CCS) opportunities and potential partnerships
• AIC Steel, GSW, McDermott, Seyang and Sendan, and NARMEL - five separate MoUs on modular construction;
• Samsung Engineering, Hyundai and Saipem - three separate MoUs on engineering, procurement, and construction;
• Elion and Green Groves – two separate MoUs to evaluate the feasibility of localising nature-based solutions;
• Honeywell – an MoU with the goal to establish a JV that will develop and implement next-generation digital solutions to improve efficiency, sustainability and enable operational excellence of industrial facilities;
• Gulf Modular Industry (GMI) - MoU to validate the feasibility of developing and using non-metallic applications in the modular building manufacturing process in the building and construction sector;
• Armorock - MoU to validate the feasibility of developing and using non-metallic polymer concrete applications in the building and construction sector;
• Shell AMG Recycling and United Company for Industry - a trilateral MoU on metals reclamation and catalyst manufacturing;
• AVEVA – an MoU with the goal to establish a strategic alliance to localise the development and deployment of various digital technologies including artificial intelligence (AI), machine learning (ML), and digital twin; and
• Baosteel - an MoU to conduct an engineering study and develop plans needed to build, own, and operate an integrated steel plate manufacturing facility in Saudi Arabia.

 

The industrial and manufacturing sector attracted USD 4.7 billion in foreign investments in the first quarter of 2021, more than four times higher than the same quarter in 2020, according to the Ministry of Industry and Mineral Resources.

The ministry also issued 114 new licenses during the quarter – making it the most popular sector among foreign investors.

Building on that momentum, the ministry noted that it had issued new 48 industrial licenses in July, with factories of foodstuff and non-metallic minerals topping the list of new factories. During the same month, 78 factories started production with an annual growth rate of some 144% compared with the same month of 2020.

Overall, the industrial sector in Saudi Arabia attracted investments of more than SAR 50 billion, marking the highest rate registered by investment volume in terms of the licensed capital in July, while the sector succeeded in providing 2,931 jobs, including 1,101 jobs for Saudis and 1,830 jobs for non-Saudis, according to a report issued by the National Industrial Information Center.

“The report revealed that the total number of existing industrial facilities in the Kingdom of Saudi Arabia by the end of July stood at 10,166 factories, where non-metallic minerals factories accounted for the highest share with more than 2,000 factories, and the total investment volume for all factories exceeded SAR 1.331 trillion,” according to the Saudi Press Agency.

Meanwhile, the Industrial Production Index surged 5.9 % in July compared to the same month last year, according to the kingdom’s latest Industrial Production Index.

“The increase of industrial production resulted exclusively from higher production in mining and quarrying activity (index weight shares 74.5%), which increased by 11.8%,” according to the General Authority for Statistics.