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The Eastern Province has taken a key role in the Kingdom’s drive to diversify away from oil

The Eastern Province has taken a key role in the Kingdom’s drive to diversify away from oil



Capitalising on core industrial strengths

Saudi Arabia’s Eastern Province, which is the largest recipient of the industrial capital investments among other provinces in the Kingdom, continues to be at the forefront of the country’s economic and industrial advancement

01 September 2022

From being known as the place where Kingdom’s first oil was extracted in 1938, to subsequently becoming the hub for the world-class oil, gas and petrochemical industries and now being dubbed “The Industrial Capital of the Entire Gulf” for its enormous industrial activities, the A’sharqia, or Eastern Province of Saudi Arabia, has undergone quite a transformation.

The largest province among the Kingdom’s 13 provinces, occupying an area of 778,500 sq km and representing 36 per cent of the country’s land mass, continues to be at the forefront of the country’s economic and industrial advancement.

‘With the support from the recently launched “Saudi Vision 2030”, the Eastern Province has taken a key role in the Kingdom’s drive to diversify its income away from oil,” says Dammam-based Asharqia Chambers in its report Economic Development – Prospects for the Eastern Province.

Most of the manufacturing industries such as petrochemicals, chemicals, steel, cement, aluminum and plastics are located in the region. These industries are mainly based in the Dammam-I, II and III industrial estates, Al Ahsa-I and II industrial estates, Hafr Al-Batin industrial estate and Jubail-I and II industrial cities.

The Eastern Province is the heart of Saudi Arabia’s oil industry and most importantly, it is home to Aramco, which is based in Dhahran, and it is also the home to most of Saudi Arabia’s oil production. Eastern province also hosts the headquarters of Sabic and the newly constructed Ma’aden’s Phosphate Company and Aluminum Smelter..

 

INDUSTRIAL ACTIVITY

As one the country’s most industrialised regions, the Eastern Province is the largest recipient of the industrial capital investments among other provinces in the Kingdom.  According to the government statistics, the total investments in this region stood at SR659.5 billion ($175.8 billion) in 2018. The chemicals and chemical products sector received the largest volume of industrial investments amounting to SR 472.1 billion, followed by coke and refined petroleum segment with SR55.9 billion and base metal sector with SR50.4 billion.

A total of 1,728 industrial units have been set up so far in the Eastern Province and the largest number of 315 plants and factories has been established in the sector of non-metallic mineral products. Other sectors in which significant numbers of industrial units have been established included fabricated metal products 248, chemicals and chemical products 210 and rubber and plastics products 200.

A look into the Eastern Province’s industrial activity since 2008 has revealed that in 2008, there were only 1,035 industrial units in this region with a capital investment of SR 219.9 billion and a work force of 132,313. The industrial activity in the Eastern Province has grown gradually and by the end of 2018, the total number of industrial units rose to 1,728 with an investment of SR659.5 billion and a work force of 253,849.

Region-wise, the Eastern Province is not only the largest recipient of the industrial capital investments this region is also the second largest area in terms of generating employment opportunities for people after Riyadh region.

In terms of sector-wise industrial activity in the whole Kingdom, the largest number of 1,650 industrial units were established in the non-metallic mineral sector and the largest number of 200,702 people were employed in the same sector. In terms of investment, the largest volume of capital investment was in the chemicals and chemical products sector by the end of 2018.

The Eastern Province is the second largest region in terms of generating employment opportunities for people after Riyadh region. In 2018, over 252,849 people were employed in the Eastern Province.

Total number of work force in the Eastern Province’s industrial sector reached over 252,849 in 2018, of which, 47,672 were employed in the chemicals and chemical products sector, followed by 37,422 in the non-metallic mineral products and 33,989 in the base metal sector.

According to the Chambers’ report, the Eastern Province has attracted a large number of foreign companies to invest in the region. In 2018, a total of 240 joint ventures and 107 fully owned foreign entities were established in the region.

The most prolific industries were the factories producing non-metallic products, followed by foodstuffs and beverages manufacturers and chemical factories. In 2018, the total number of commercial registration in the Eastern Province stood at 179,598 while the new licenses issued during the period reached 35,859.

 

INFRASTRUCTURE

The Eastern Province has made unprecedented progress in its infrastructure development building well-set out road networks, railways, new international airport, utility services, healthcare and educational establishments and a number of world-class industrial cities and estates.

These industrial cities include Jubail Industrial City One and Two, Dhahran Techno Valley, Ras Al Khair Mining City and the latest large-scale infrastructure facility-- the King Salman Industrial Park, in addition to Saudi Authority for Industrial Cities and Technology Zones (Modon) - developed a number of industrial estates like Dammam 1st, 2nd and 3rd industrial estates, Al Ahsa 1st and 2nd industrial estates and Hafr Al-Batin Industrial Estate.

These industrial cities in the Province got a further boost in 2021 when Saudi Arabia launched new initiatives to diversify, industrialise and energise the private sector. These include the Shareek (partner) investment programme, and complimentary initiatives such as Project HQ and Made in Saudi.

The Dammam’s 1st Industrial City was established in 1973 on an area of 2.5 million sq m while the Dammam 2nd Industrial City came into being in 1978 and was built on an area of 25 million sq m.

The Dammam 3rd Industrial City was set up in 2012 on an area of 48.5 million sq m. Al Ahsa’s 1st Industrial City was established in 1981 occupying an area of 1.5 million sq m while the Eastern region’s largest industrial estate, the Al-Ahsa 2nd Industrial City was built in 2013 over an area of 300 million sq m. The Hafr Al-Batin Industrial City was built in 2012 on a total area of 100 million sq m.

 

ROYAL COMMISSION

The two industrial cities---Jubail Industrial City-I & II, have been developed under the the Royal Commission for Jubail and Yanbu.

The Jubail Industrial City-I has been home to a group of  world-class industries engaged mainly in petrochemicals, chemicals fertilizers, industrial gases, steel, iron and oil related industries. Its industrial zone has around 19 basic industries, with 136 ancillary installations and produces steel, aluminum, plastics and fertilizers under the supervision of Sabic.

Jubail Industrial City II was built to house over 22 new primary industries. The development of the city comprises two ports—industrial and commercial—located within a 17-sq mile artificial harbor protected by 11 miles of breakwater.

Ras Al-Khair Mineral City has been mainly planned to exploit the mineral deposits of phosphate and bauxite. It is home to a large number of mining facilities, such as aluminum and bauxite factories, and other industries. A water desalination and a power generation plant have been built with a capacity of 1,025 million cubic meters of desalinated water and 2,600 megawatts of electrical output respectively. Its aluminum plant between the Saudi Arabian Mining Company (Ma’aden) and Alcoa is a prominent project. 




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