Saudi Arabia is seeking investment worth more than 96 billion Saudi riyals ($25.6 billion) in its manufacturing sector as the Arab world’s biggest economy looks to expand its industrial base and continue to diversify.
The kingdom has identified 50 investment opportunities as part of its National Industry Strategy, state-run news agency SPA reported on Tuesday, citing Minister of Industry and Mineral Resources Bandar AlKhorayef.
The opportunities in the machinery and equipment sector, which are now available on the Invest Saudi platform, aim to further expand the industrial sector, halve imports and boost exports to regional and global markets, said Mr AlKhorayef, who is also chairman of the National Industrial Development Centre.
The NIDC is also collaborating with the Public Investment Fund, the kingdom's sovereign investor, to “build a business model to take advantage of the investment opportunities developed by the sector”, SPA quoted the minister as saying.
“Eight opportunities have been selected for initial evaluation and two opportunities for final evaluation.”
The Industrial sector is among the central planks of Riyadh’s Vision 2030 programme, the overarching economic transformation agenda that seeks to diversify the country's economy away from oil.
In October, Saudi Arabia launched the National Industry Strategy to triple industrial output and increase the value of the country’s industrial exports to about $149 billion by 2030.
The initiative aims to attract investment, boost non-oil exports and grow the kingdom's gross domestic product.
It has identified 800 investment opportunities worth $266.2 billion to provide sustainable economic returns for Saudi Arabia by 2030.
The strategy seeks to increase the number of factories in the kingdom to 36,000 by 2035, from 10,640, and boost total additional investment in the sector to 1.3 trillion riyals.
On Monday, Saudi Aramco, the world's largest oil-producing company, the PIF and China's Baoshan Iron and Steel, better known as Baosteel, signed an agreement to build the kingdom's first steel plate manufacturing complex.
The plant is expected to have an annual capacity of up to 1.5 million tonnes and will be built in the Ras Al Khair Industrial City, one of four new special economic zones recently announced by Saudi Crown Prince Mohammed bin Salman.
The machinery and equipment sector, which supports all industries, including oil and gas, petrochemicals, mining, food and construction, posted nearly $32 billion in revenue in 2019, Mr AlKhorayef said.
The largest projects set up in the past two years include three units involved in casting and forging that are key inputs of the machinery and equipment sector for the broader industrial base.
Investments in these units exceeded $1 billion, Mr AlKhorayef said.
The projects will help to establish “complete value chains from raw materials to finished products, and [reduce] imports of cast and forged products, as well as manufacturing valves and pumps”, Mr AlKhorayef said.
Through the Future Factories Programme, which seeks to automate factory operations, a potential investor is also considering plans to set up an industrial robotic arms unit in the kingdom, a step that will help to develop the robotics industry in the country, he said.
“Preserving existing factories and enabling them through policies and regulations developed by the machinery and equipment sector in the NIDC” are among the most important pillars of the NIS, Mr AlKhorayef said.
