Al Salem: ambitious vision

Al Salem: ambitious vision

Helping build an industrial power

Saudi Arabia’s march towards greater economic growth, diversification and employment owes much to Modon, which has become one of the pillars of the Saudi Vision 2030

May 2020

As an enabler of industry that oversees 35 industrial cities around the kingdom, the Saudi Authority for Industrial Cities and Technology Zones (Modon), has bolstered economic growth for both the public and private sectors, diversifying the economy and raising employment levels.

Over the years, it has strengthened its strategy that aims to facilitate the industrial sector, contribute to the development of local industry, and attract local and foreign investments that provides added value to its industrial cities.

Established in 2001, Modon oversees 35 existing Industrial Cities today. The Industrial Cities include 3,500 productive factories providing employment to 500,000 workers, according to a SPA repot.

Until now, the developed industrial lands in the Industrial Cities exceed 198.8 million sq m, distributed geographically, and they fall under three sectors; these are cities of the Eastern Sector, cities of the Central Sector, and cities of the Western Sector.

Covering different regions of the kingdom, with total investment exceeding SR367 billion ($97.86 billion), Modon also provides several advantages, products, services, and attractive incentives, in order to attract investments from the GCC and the global markets to Saudi Arabia.

As part of Saudi Vision 2030, the kingdom has established the National Industrial Development and Logistics Vision Realization Program (NIDLP) that aims to transform Saudi Arabia into a leading industrial power and an international logistics platform in a number of promising areas.

The NIDLP will focus on the 4th Industrial Revolution such that it will generate ample employment opportunities for Saudi cadres, boost trade balance and maximise local content. The programme focuses on four key sectors; industry, mining, energy and logistics.

Modon has attracted investments in varied sectors including food and pharmaceuticals

Modon has attracted investments in varied sectors including food and pharmaceuticals

The programme also designs and provides a range of essential enablers that include developing appropriate systems, providing the required financing, developing infrastructure, industrial lands and private areas, and enhancing research and innovation.

The Director General of Modon Eng Khalid Bin Mohammed Al-Salem said: “The Saudi Vision 2030 has adopted industry as a strategic choice to diversify the Saudi economy, towards achieving sustainable development.”

He added that Modon has become one of the pillars of the Saudi Vision 2030, as an enabler of industry that oversees 35 Industrial Cities around the kingdom and through assigned initiatives by NIDLP.

Modon has launched its new strategy aiming to enable the industrial sector, contribute to the development of local industry, strengthen local and global partnerships to attract local and foreign investments that have added value, and to transfer and localise industrial knowledge in the Industrial Cities.

Eng Al-Salem also stated that Modon’s approach is based on integration, cooperation, and building on what have been achieved to provide continuous development, at the level of internal work environment, relationships with local and foreign investors, government agencies, and with private and public sectors.

He said: “In the past, we focused on expanding the scope of Modon from providing major infrastructures into playing an active role as enabler of industry, enhancing factories’ industrial competitiveness, promoting the ease of doing business by reducing the number of required industrial licenses and expanding their validity period, and reducing the time and requirement to obtain industrial licenses.

“This, in addition, cooperated with competent authorities to facilitate access to credit, and to provide advanced infrastructures and Internet services in cooperation with the Ministry of Communications and Information Technology.

“Modon also launched a number of new products for its industrial partners, and the number of products increased from 4 in 2015 to 14 by the end of 2019, and the industrial sector witnessed the positive impact of these products on micro, small, and medium enterprises and contributed to strengthening the supply chain in Saudi Arabia.”

Al-Salem added that Modon has succeeded in promoting the growth of the privatisation of industry, both in quality and quantity aspects in the Industrial Cities, supported by providing a number of incentives.

Al-Salem also stated that privatisation numbers has exceeded expectations, and the product of “ready-built factories” keeps attracting investors.

Saudi Arabia is witnessing high growth in qualitative industries. In 2019, the contracts for food manufacturing became five, while the industrial contracts for pharmaceuticals manufacturing witnessed an increase of 70 per cent, compared to the corresponding period of the previous year, 2018.

These industries are of strategic importance to the Kingdom and its health security, along with the positive impact of increasing Saudi exports. The year 2019 also witnessed the launch of the operations of food and pharmaceutical factories in Saudi Arabia, he added.

Modon was able to attract leading global companies for qualitative investments, including General Electrics to manufacture gas turbines, Isuzu Motors to produce trucks, Ebara Pumps Saudi Arabia LLC, Schlumberger to drill rigs, and Henkel AG for chemical industry.

The Dammam 2nd Industrial City hosts two Siemens’ industrial factories: the first factory covers 70,000 sq m and manufactures gas turbines, while the second factory produces automatic control panels and covers an area of 1,500 sq m.

Among other investments, it has signed a contract with Pharco Pharmaceuticals to build a pharmaceutical complex including research and development centres for Pharch, covering more than 62,000 sq m in Al-Madina Industrial City. The SKAI Group, which is specialised in treating rocks and specific metals, is another investor attracted by Modon. It will build its factory in Dammam 3rd Industrial City over 100,000 sq m. Modon has also specified one of ready-built factories in Dammam 2nd Industrial City for Italian CEG, which is specialised in Uninterruptible Power Supply (UPS).

Modon and the General Authority for Military Industries (Gami) too have signed an agreement to attract qualitative local and foreign investments to transfer and localise qualitative technology in the Industrial Cities.

According to the agreement, the two sides will guide licensed investors toward targeted fields in Saudi Industrial Cities, affiliated with Modon, which will also provide incentives to investors in addition to working on providing industrial constellations for the targeted military sectors along with options for investors to support the establishment and empowerment of the project and ensuring its expansion, sustainability and development.

Modon has attracted the Science Technology Company to establish a complex for the military industries in Al-Kharj Industrial City, to cover 27,000 sq m. Modon has also specified industrial land in Riyadh 2nd Industrial City for INTRA Defense Technologies, being the first factory in Saudi Arabia to produce unmanned air vehicles.

This agreement contributes to promoting investment in military industries and makes it an important pillar for economic development according to the objectives of the Saudi Vision 2030 which aims to localise 50 per cent of military equipment spending by 2030.

Al-Salem affirmed that there are two factories under construction specialised in food sector covering an estimated space of 34,000 sq m, one in Sudair City for Industry and Businesses and the other in Jeddah 1st Industrial City, belonging to Alshaya International Group.

The authority has also signed a cooperation agreement with the Chinese TEDA Investment Holding Co., Ltd to attract manufacturing industries with high added-value to Dammam 3rd Industrial City, where 1,000,000 sq m space has been specified for qualitative foreign investments.

At the level of logistics services and in line with Modon’s initiatives in NIDLP, it is developing smart logistics warehouse on an area of 249,000 sq m near to Jeddah 2nd Industrial City for Al-Nahdi Medical Company.

Modon and its partners, both in public and private sectors, are working to provide a logistic environment, generally serving the kingdom, and particularly serving the industrial sector.

More Stories