NIDLP

SAUDI INDUSTRIAL SECTOR ON FAST TRACK TO RECOVERY

The National Industrial Development and Logistics Program (NIDLP) has made great strides since it was launched in 2019. The Saudi Vision 2030 pillar, aimed at strengthening and expanding the country’s industrial, logistics and manufacturing base, has attracted billions of dollars in capital, created jobs, and harnessed the kingdom’s non-oil sector.

The NIDLP’s 2022 Annual Report highlights the progress made so far, the most impressive of which is the increase of total non-oil exports to SAR 435 billion, a 38% increase over 2021. In addition, the four sectors of the programme — industries, mining, energy, and logistics and transportation — created more than 266,000 new jobs last year, bringing the total number of workers to 1.655 million.

“In the energy sector, ownership of the Saudi Power Procurement Company has been transferred to the government to enable the electricity sector to achieve its strategic objectives. As a result, the company signed power purchase agreements for renewable energy projects with total capacity of 3.2 gigawatts (GW), which will contribute to attracting investments worth SAR 9 billion. This is in addition to launching five new projects for renewable energy electricity production,” according to the report.

Five new renewable energy ventures were also developed last year, including three wind energy projects in Yanbu, Al-Ghat, and Waad Al-Shamal, and two solar projects in Al-Hanakiyah and Tabarjil. With total projected capacity of 3.3 GW, these projects will attract investments totalling SAR 12 billion. The sector also achieved a 63% localisation rate for industries related to oil and gas, thus achieving the target set for 2022.

   

The country’s promising mining sector achieved a second straight year of record revenues in 2022, rising to SAR 1.45 billion. This was driven by a successful tendering process completed in 2022, which saw exploration licenses granted for two important mining developments, namely Al-Kheniqiyeh mining site in Al-Quwaiiyah Governorate in the Riyadh region for SAR 255 million, which is one of the largest exploration sites in the kingdom. The area spreads over 350 square kilometres (sq km) and the mineral resources are estimated at about 25 million tonnes. The other license was awarded to explore the Umm Al-Dummar mining site, which covers an area of more than 40 sq km, and features copper, zinc, gold, and silver deposits.

In addition, a regional geological survey was completed in 2022, making new data accessible on the geological and geochemical potential of more than 25% of the Arabian Shield. Mining licenses reached 2,272 including those involving reconnaissance, exploration, mining and small-scale mine, and building materials quarry.

Ma’aden, the company leading the kingdom’s mining sector also saw strong financial support with Moody’s Investors Services assigning the company a long-term issuer rating of Baa1 with a ‘stable’ outlook, and Fitch Ratings assigning a long-term issuer default rating of BBB+, also with a ‘stable’ outlook. The ratings affirm Ma’aden’s sustainable low-cost base, and robust financial profile, as local and international investment opportunities are assessed.

“The investment grade ratings reflect Ma’aden’s diversified multi-commodity business model with global leadership in phosphate production, the Middle East’s largest integrated aluminium value chain, and a scalable base metals and new minerals business,” the company said.

 

In the industrial sector, the kingdom launched the National Industrial Strategy (NIS), a roadmap for the sector’s rapid growth.

“Also, the Saudi Industrial Development Fund approved loans worth SAR 14 billion to fuel growth in the industrial, energy and mining sectors, while the Saudi Export-Import Bank provided credit facilities valued at SAR 14.6 billion to improve access to non-oil exports,” according to the NIDLP 2022 report.

Latest bulletin by the National Industrial and Mining Information Center also showed 385 new industrial licenses were issued with investments amounting to SAR 14 billion in the first four months of the year. As many as 314 factories started production with investments exceeding SAR 8.10 billion, enabling the sector to create more than 29,000 job opportunities, 15,000 of these allocated for Saudis, indicating a total workforce of 726,750 employees by the end of April. In addition, the total number of factories in the kingdom at the end of April reached 10,873, with investments amounting to SAR 1.4 trillion.

The logistics sector saw the creation of a special integrated logistics area at King Khalid International Airport, and the opening of an Apple distribution centre, both of which will help meet the demands of local and regional markets.

The kingdom’s railway expansion was also on track, with Saudi Arabia Railways (SAR) inaugurating a project that links the north and east networks in the Eastern Province, and providing logistical support to industrial and commercial ports in Jubail and Dammam.