Saudi Arabia issues 124 industrial licences to boost economy

Investments into new permits, issued in January, reached $640 million

Saudi Arabia, the world's biggest exporter of oil, is diversifying its economy away from hydrocarbons. Reuters

Saudi Arabia issued 124 industrial licences in January, with investments into new permits reaching 2.4 billion Saudi riyals ($640 million), the government said.

Twenty-nine licences were issued for food manufacturing, 18 for non-metallic mineral production, 12 for manufacturing chemicals and chemical products, 11 for metal product manufacturing (excluding machinery and equipment), and eight licences for the manufacturing of rubber and plastic products, among others.

Small businesses acquired 86 per cent of new industrial licences, while medium-sized and micro-sized enterprises acquired 11 per cent and 2.5 per cent, respectively, the kingdom’s Ministry of Industry and Mineral Resources said.

Overall, national factories hold nearly 80 per cent of all permits, followed by foreign establishments and joint investment establishments that hold 10.5 per cent and 10 per cent of licences, respectively.

The new industrial licences were distributed to 12 administrative regions, led by Riyadh with 44 factories.

Saudi Arabia, the Arab world’s largest economy and world's biggest exporter of oil, is diversifying its economy away from hydrocarbons and has introduced several initiatives under its Vision 2030, to develop its industrial and mining base.

In October, the Saudi government unveiled a National Industry Strategy, aimed at increasing the value of the kingdom's industrial exports to about $149 billion by 2030.

It is designed to attract investment into the industrial sector, boost economic diversification and increase non-oil exports.

The programme has identified 800 investment opportunities worth $266.2 billion to provide sustainable economic returns for the kingdom by 2030, according to the authorities.

In January, the number of existing factories in the kingdom and those under construction stood at 10,633, amounting to 1.4 trillion riyals of investments, according to the data compiled by the ministry's National Centre for Industrial and Mining Information.

Of these, 164 factories started production in January with an investment of 2.7 billion riyals. National factories accounted for 89 per cent of this, followed by foreign-owned and joint factories at seven per cent and four per cent, respectively.

Non-metallic metal factories took the lead with 32 factories, followed by 31 food factories, 21 fabricated metal factories, 18 rubber and plastics factories, and 12 chemical factories.