NIDLP

SAUDI TURNS ITS LOGISTICS HUB DREAM INTO COMMERCIAL REALITY

The National Industrial Development and Logistics Program (NIDLP) is expanding at a rapid pace across all its key areas: manufacturing, food, energy, mining, logistics, and transportation.

In line with this, the Saudi Authority for Industrial Cities and Technology Zones (Modon) has signed several contracts and agreements in February to deepen the kingdom’s food and beverage industry, with investments of SAR 1.07 billion.

The number of food factories has also surged to reach 1,171 with a combined area of around 10 million square metres by the end of 2022. Authorities have prioritised the localisation of food industries in a bid to contribute to achieving the kingdom's food security goals, as part of the initiatives included in the NIDLP programme of Saudi Vision 2030.

Some of the agreements include a SAR 50 million venture with Jordan Valley Company for Food Industries (Al-Bayrouty) to produce grains and legumes, and a SAR 375 million undertaking with Kuwaiti Danish Dairy Company (KDD) for a food and beverage factory in Sudair City.

Modon also recently signed deals with several specialised companies, including the Arab Seara Food Industries Company – the Middle East and North Africa investment arm of the Brazilian "GPS" group, which is the largest producer of meat products and derivatives in the world – the Alshaya Group, and IFFCO to support Modon’s initiative to establish "food clusters,” a key component of NIDLP.

                  

A number of NIDLP projects are also being planned. Mawani (Saudi Ports Authority) and the Jeddah Chamber of Commerce and Industry signed a deal to set up a SAR 1 billion integrated logistics park at Al Khumrah in the south of Jeddah.

The logistics park will bolster Mawani’s role in developing the national transportation ecosystem, helping to position the kingdom as a global logistics destination. This is in line with the goals set in the National Transport and Logistics Strategy (NTLS), alongside NIDLP, which aims to transform Al Khumrah into a world leading platform for logistics and supply chain activities.

The park will create more than 10,000 direct and indirect job opportunities in the logistics sector, while strengthening Jeddah Islamic Port’s position as a major maritime hub.

The 3-square-kilometre park comprises three zones including shared warehouses, medium-sized storage yards and single warehouses, as well as large storage yards and on-demand warehouses.

In other developments, the US healthcare and wellness products company iHerb and Korea's logistics solutions provider CJ Logistics have chosen Riyadh as their operational hub in the Middle East and Africa (MEA) to meet rising consumer demand. The companies signed an eight-year agreement whereby CJ Logistics will provide consumers in the MEA region with iHerb products through its global distribution centre (GDC). The facility, located in Riyadh's Integrated Logistics Bonded Zone, will be built over an area spanning 18,000 square meters (sq m), with expected daily production capacity of 15,000 shipments.

All these developments are vital in realising Saudi authorities’ goal of increasing the transport sector and logistics services’ GDP contribution to 10%, from the current level of 6%.

 

NIDLP and its entities are working to transform the kingdom into a global logistics platform by leveraging its strategic location linking three continents (Asia, Europe, and Africa). They are also taking advantage of the country’s solid infrastructure, with 28 airports connected through an integrated road network of more than 73,000 kilometres (km), earning Saudi the recognition of being one of world’s most competitive economies in terms of road connectivity.

The roads are also integrated with 10 ports distributed along Saudi coasts and railways, further facilitating the ecient movement of goods and people across borders. In addition, the country is adopting modern technologies into its existing modes of transportation to stay abreast of changes and remain globally competitive.

All told, the kingdom has 3,690 bridges and 76 tunnels, which fall under the responsibility of the Ministry of Transport and Logistic Services. Moreover, the total number of flights in 2022 exceeded 700,000.

“In 2022, 56 roads totalling 1,610 km were built, the terms of contracts pertaining to the field have been clearly spelled out, and 608 bridges and 37 tunnels were inspected and evaluated, in order to ensure that roads are in very good working conditions,” according to a Saudi Press Agency report. 

Around 13 strategic ports on the Red Sea and the Arabian Gulf are expanding and the kingdom has obtained the Maritime Quality Certificate from the United States Coast Guard.

“Also, six agreements were signed with marine classification agencies, and exceptional agreements with local, regional and global companies were signed to establish six integrated logistical areas, and 17 new navigation services linking the kingdom’s ports with ports to the east and to the west, and enhancing commercial trac were added,” according to the report.