The Kingdom’s industrial economy covers 16 strategic sectors

The Kingdom’s industrial economy covers 16 strategic sectors

Riyadh, Eastern Province dominate KSA industrial sector

Industrial establishments in Saudi Arabia reached 10,138 at the end of July. Riyadh leads the Saudi industrial sector with 40 per cent of the Kingdom’s factories followed by the Eastern Province at 2,206 factories

01 September 2021

Saudi Arabia’s industrial sector comprised 10,138 factories as of the end of July, 40 per cent of which were in the capital Riyadh, the Ministry of Industry and Mineral Resources said, as per an Arab News report.

At the same time, the kingdom’s Industrial Production Index (IPI) rose by 11.9 per cent in June 2021 from a year earlier and by 3.6 per cent from May, official data showed.

The Kingdom’s industrial economy covers 16 strategic sectors and is distributed over 13 administrative regions throughout the country, according to the report from the ministry’s National Center for Industrial and Mining Information.

Riyadh is home to the largest number of factories, at 4,079. The Eastern Province recorded 2,206 factories, Makkah has 1,911, and Al-Qassim 428, followed by Al Madinah with 416 factories, the report showed.

The strategic sectors in the Kingdom include metals, food and plastic products, machinery and equipment, the specialised chemical industry, basic and medium chemicals, automobile factories, refined oil products, pharmaceuticals, medical supplies, renewable energy, marine and aviation, military, and building materials.

Building materials dominate the Kingdom industrial sector with 2,016 factories, followed by 1,705 working in the production of metals, 1,445 food factories, 1,317 for plastic and rubber products and 571 machinery and equipment factories.

There were 571 specialised chemical factories in the Kingdom, 399 for basic and medium chemical factories, 169 manufacturing automobiles and parts and 122 oil refining products factories. Rounding out the list are 75 pharmaceutical factories, 49 for medical supplies, and nine in the area of renewable energy.

Saudi Arabia issued 307 new factory licenses during the first three months of this year representing a total investment of SR17.72 billion ($4.73 billion), the Ministry of Industry and Mineral Resources revealed last May.

“Development of this sector is one of the pillars of Saudi Vision 2030 to create a competitive economy and sustainable development,” Dr Osama Ghanem Al-Obaidy, economic adviser and international economic law expert, told Arab News. “Saudi Arabia aims at developing promising industries in food, medicine, and medical supplies, as well as military industries, and industries relating to oil, gas, and petrochemicals, mining, and chemicals,” he said.


IPI up by almost 12pc

The kingdom’s Industrial Production Index (IPI) rose by 11.9 per cent in June 2021 from a year earlier and by 3.6 per cent from May, official data showed.

The increase resulted almost exclusively from higher production in mining and quarrying, which gained 19.3 per cent on an annual basis and 4.5 per cent from the previous month with Saudi oil production operating at high volumes, as per the General Authority for Statistics (GSTAT).

The Kingdom increased its oil production from 7.4 million bpd in June 2020 to 8.9 million bpd in June 2021. Non-oil manufacturing activity decreased by 4.2 per cent in June 2021 compared with the same month last year, and by 0.4 per cent from May 2021.The electricity and gas supply increased by 13.9 per cent, with little impact on the IPI because of its low weight, according to GSTAT.

The Kingdom is anticipating increased industrial activity in coming years through advanced technology. Advanced technology from the Fourth Industrial Revolution (4IR) is expected to generate around SR1 trillion for the Saudi economy in new revenue streams, a senior Saudi official told a conference, recently.

Saudi Minister of Economy and Planning Faisal bin Fadel Al-Ibrahim recently said that the Saudi Centre for 4IR will lead the Kingdom’s role in utilising advanced technologies and their local and global implications. The Minister said the new center will contribute to global discussions on the use of 4IR technology, such as 5G and artificial intelligence, especially amid the Covid-19 pandemic that has introduced new challenges to countries.

“Covid-19 intensified the need for data and evidence-based iterative policymaking supported by technology-driven and innovation-based solutions,” he said at the first Saudi 4IR Forum held in Riyadh.

According to a Saudi Gazette report, the Minister said that there is a lesson from the pandemic that the use of solutions based on the 4IR revealed the reality of the widening gap between the leading economies and the rest of the world.

“Despite the significant progress made since the launch of the Kingdom’s Vision 2030 and during the pandemic, the catalyst for further economic growth could be seizing part of the opportunities that exceed $3 trillion over the next five years and their multiplier effects,” he said while addressing a session of the Forum.


59 licenses issued in May

Saudi Arabia issued 59 new industrial licenses in May to companies with capital of SR532 million ($141.8 million), compared with 33 in the same period last year, the Ministry of Industry and Mineral Resources said in a statement.

A report issued by the National Center for Industrial Information showed that 97 per cent of the total industrial licenses issued were for national companies, while small factories accounted for nearly 75 percent of the new licenses.

Food manufacturing was the largest sector, accounting for 17 percent of the new licenses. Riyadh was the most common location for new industrial licenses in May, with 22, followed by the Eastern Province with 12 licenses. Makkah saw 15 new factories open last month, accounting for 76 percent of the total.

April witnessed the provision of 6,753 job opportunities in the Saudi industrial sector, 60 per cent of which were for Saudi citizens. Existing industrial establishments in Saudi Arabia reached 10,070 at the end of May, with a total investment of SR1.134 trillion, according to the National Center for Industrial Information.


MODON signs 10,300 deals

Meanwhile, the Saudi Authority for Industrial Cities and Technology Zones (Modon) signed 10,300 investment contracts in 2020, Argaam reported.

The investment contracts were aimed to encourage the manufacturing sector and promote Saudi goods. The investments will also help create jobs in different industrial sectors in the Kingdom.

Modon supervises the industrial complexes and cities developed by the private sector in the Kingdom. It aims to cultivate a technological environment that enables the industry to contribute to the national economic development.

Saudi Arabia’s industrial sector is undergoing fundamental changes with the aim of achieving the objectives of Vision 2030, which include more participation by women in the development process, was well as creating more opportunities in such a vital sector.

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