Attracting an investment of more than $267 billion, with 620 industrial projects manufacturing close to 100 basic products, the industrial cities of Jubail and Yanbu in Saudi Arabia – run by the Royal Commission for Jubail and Yanbu (RCJY) – are continuing to expand aggressively.

Alaa Nassif, the CEO of RCJY, recently signed five contracts at a value of SR163.05 million ($43.47 million) for establishments and developments in Yanbu Industrial City.

Nassif signed two contracts at a value of SR49.98 million, and SR16.93 million, respectively, for the third and fourth phases of developing a main road in Yanbu, according to the Saudi Press Agency (SPA).

Another agreement was signed to rehabilitate and process warehouses and workshops in Al Mihan district worth SR8.62 million, followed by a contract to maintain and operate RCJY’s computers at SR21.75 million. The CEO signed contract for the settlement of land in the multi-logistics area worth SR65.78 million.

Earlier, in a related move, the RCJY signed four development contracts worth SR436.4 million. As per the first contract, the RCJY will offer geotechnical examinations regarding the soil in the extension area of Yanbu Industrial City at a total value of SR5.4 million, according to a statement.

The second deal signed was regarding the supply and installation of equipment for RCJY’s colleges and institutions in Yanbu at a value of SR11.22 million.

The establishment of family housing in Al Nakheel district is a part of the third agreement worth SR42.81 million, while the fourth included designing and setting up an electric power distribution station 8H at a value of SR376.93 million.

Clearly, the cities are emerging as one of the kingdom’s favoured locations for new industrial development. The cities’ development story got a further push In June last year, when the Saudi government set the second highest budget for RCJY at SR41.5 billion ($11.06 billion) along with tough targets, as it rolled out the National Transformation Program 2020 (NTP) across 24 Saudi governmental bodies.

Among the targets that has been set under the NTP for the RCJY, the most important ones include: increasing the number of value-added manufacturing products by 19 per cent from 432 to 516 different products; increasing RCJY’s cities industrial production by 23 per cent from 252 million tonnes to 309 million tonnes; and increasing the private sector’s new investments in industrial cities by 55 per cent from SR681 billion to SR1.07 trillion.

The cities contain Saudi Arabia’s leading petrochemical and minerals clusters and are a main contributor to the country’s economic growth. Jubail is home to Sadara Chemical Company (Sadara), the world’s largest chemical complex ever built in a single phase, while Ras Al Khair is building the world’s largest aluminium smelter – and Saudi Arabia’s first. The smelter is the cornerstone of Ras Al Khair Industrial City, which is fast becoming the country’s aluminum and phosphate centre, 90 km north of Jubail.

It is estimated that the RCJY accounts for 65 per cent of industrial investment in the entire Gulf region and has a 20.2 per cent average annual growth rate in terms of foreign direct investment (FDI).

According to Yanbu Industrial City Economic Review, Jubail and Yanbu currently produce approximately 10 per cent of the world’s petrochemicals production. RCJY, which is also now developing Ras Al Khair Industrial City, together contributes SR144.7 billion or around 12 per cent to the kingdom’s GDP and to 65 per cent of the domestic industrial output.

The cities’ combined output of petrochemical and refining products, among other items, feed the needs of local industries, leaving large volumes for export. They are responsible for more than 71 per cent of total Saudi exports, while the non-oil  exports of the commission cities  amount to 85 per cent of  all kingdom exports in that category.

According to the Gulf Petrochemcials and Chemcials Association (GPCA) website, the cities contribute 85 per cent of Saudi Arabia’s non-oil exports and produce about 10 per cent of global petrochemical products. They are home to 175,000 workers, 70,000 students and a host of investors from all over the globe.

RCJY cities’ competitive package of land, utility and infrastructure services, coupled with easy access to markets, makes it a must for consideration for any firm looking to expand its footprint in the Gulf region.