Saudi Arabia and Hyundai Heavy Industries plan to set up the Middle East's first marine engine manufacturing plant in the kingdom to develop its nascent industries sector and diversify the economy away from oil.
Oil giant Saudi Aramco, Saudi Arabian Industrial Investments Company (Dussur) and South Korea's Hyundai will enter a joint venture to set up the facility in the eastern province coastal town of Ras Al Khair, Dussur said on Tuesday. Aramco will be the majority shareholder in the project.
"This partnership marks our commitment to enable private sector growth in the kingdom by unlocking investments and attracting foreign direct investments," said Raed Al Rayes, Dussur's chief executive.
The deal is part of Saudi Arabia's efforts to develop the local manufacturing sector as it seeks to be less dependant on oil, create jobs for young Saudis and gain technical knowledge. Dussur was established in 2016 by Aramco, the Public Investment Fund and Sabic with the aim to develop industrial sectors in the kingdom.
Aramco will own 55 per cent of the joint venture, Dussur will hold 15 per cent and Hyundai Heavy Industries will keep 30 per cent.
The plant will become the main supplier for local maritime businesses, Dussur said.
The venture will create more than 720 jobs and entail the transfer of knowledge and industry know-how to Saudi Arabia, according to Dussur.
The plant will produce marine engines and pumps that power vessels, auxiliary equipment, generators and propulsion systems. The engines will also be used in commercial vessels propulsion, electrical power generation, cargo oil pumps and off-shore rig pumps.
"Facilitating such ventures reflects our mandate at Dussur, where we strive to support the diversification of the local economy by creating sustainable industrial supply chains that will serve the current and regional local demand for years to come," Mr AlRayes said.
In 2017, Dussur along with General Electric set up a 1 billion Saudi riyal (Dh980.5 million) joint venture in the eastern city of Dammam to manufacture gas turbines.
