Saudi Arabia’s industrial sector which has done particularly well in 2021 attracting trillion dollar investments, received a fillip as the kingdom launched a new strategy with the World Economic Forum (WEF) to promote industrial innovation and advanced manufacturing in the country.

Last month, Saudi Arabia’s Minister of Industry and Mineral Resources and Chairman of the Saudi Industrial Development Fund (SIDF) Bandar bin Ibrahim Al-Khorayef launched the Saudi Advanced Manufacturing Hub, or Saudi AMHUB strategy, aiming at positioning Saudi Arabia at the global forefront of industrial innovation and advanced manufacturing.

The total volume of investments in Saudi Arabia’s industrial sector accumulated to $354 billion by the end of January

This will pave the way for Saudi’s industrial sector to implement the advanced mechanisms and practices of leading industrial experiences around the world, said Al-Khorayef, during the launch ceremony held in Riyadh, last month.

Led by SIDF, Saudi AMHUB will have 24 core members from the public, private and academic sectors, and it will promote the Kingdom’s industrial sector towards adopting advanced manufacturing. SIDF joined the WEF in January 2021, in a move to adopt advanced industrial practices in the Kingdom.

“In addition to that, it will be strengthening links between investors and providers of advanced technologies globally and enabling the local industrial sector to use such advanced technologies,” said SIDF CEO Ibrahim bin Saad Al-Mojel in a press statement.

The strategy’s main aim is to provide practical solutions to the country’s industrial sector while raising the operational and financial efficiency of factories.

$21BN INVESTMENT IN 2021

In 2021, Saudi Arabia attracted SR81 billion ($21.6 billion) of investments in the industrial sector for both the private sector and joint ventures with government entities, the Saudi industry minister said.

“This industrial sector in general is really growing. I mean, we have seen 2021... We achieved more than SR81 billion of new investments coming during the year,” Al-Khorayef told Reuters on the sidelines of the kingdom’s inaugural arms fair, the World Defense Show.

A series of joint ventures between Saudi firms and top global aerospace and defence manufacturers were announced in recent years as part of that strategy to localise some industrial capabilities.

Riyadh plans to invest SR12 trillion by 2030 to help refocus the economy away from oil, while giving foreign firms until the end of 2023 to set up headquarters or risk losing out on government contracts as it competes with regional heavyweights, especially the UAE, for foreign capital and talent.

Saudi authorities say much of the plan is still in its initial phase and money will increasingly start pouring into the kingdom over the next few years.

The minister said the kingdom is ready to work with Western companies or others, regardless of their origins, as long as they “share a long-term view” and “have the right technology needed in the kingdom”.

Al-Khorayef said he was not able to comment on the government’s position on doing business with Russian companies as the West imposes sanctions on Moscow over its invasion of Ukraine.

INVESTMENTS ACCUMULATE

The total volume of investments in Saudi Arabia’s industrial sector accumulated to SR1.33 trillion ($354 billion) by the end of January, official data showed.

In its official bulletin, the Ministry of Industry and Mineral Resources said investments worth SR1.8 billion were recorded in January.

Seventy-nine industrial licenses were issued in January and 106 new industrial units began operations while 72 industrial licenses were issued during February 2022, with investments amounting to over SR1.1 billion ($293 million).

The number of licenses in the mining sector reached 1,989 with 67 licenses issued during January, the bulletin showed.

During the month of February, the volume of licensed labour amounted to 2,339 workers.  This has brought the total number of factories in Saudi Arabia to 10,397, while the volume of licensed labour reached 1,038 million workers, the statement showed citing a report by the National Center for Industrial and Mining Information.

It showed that the biggest share of the new industrial licenses was for the food production industry with 12 licenses followed by the rubber and plastic products with nine and seven licenses were issued for the manufacture of non-metallic minerals.

RIYADH LEADS

Meanwhile, Riyadh led the Saudi industrial sector with 40 per cent of Kingdom’s factories. Saudi Arabia’s industrial sector comprised 10,138 factories as of the end of July 2021, 40 per cent of which were in the capital Riyadh, the Ministry of Industry and Mineral Resources said.

Riyadh accounted for most of the new licenses according to the geographical distribution information with 25, and then the Eastern Region with 17 and 10 licenses in the Makkah region.

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 factors, at 4,079. The Eastern Province recorded 2,206 factories, Makkah has 1,911, and Al-Qassim region 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 p75 pharmaceutical factories, 49 for medical supplies, and nine in the area of renewable energy.