Saudi Arabia has achieved a Guinness World Record for the largest food cluster globally with the Jeddah Food Cluster, encompassing more than 11 million square meters and establishing a new international standard. The Saudi Authority for Industrial Cities and Technology Zones (MODON) has announced ambitious plans for this cluster, aiming to attract investments of up to SAR20 billion and generate 43,000 job opportunities by 2035. This initiative is designed to drive economic growth, bolster food security, and enhance national exports.
Economic impact and contributions
Over the next ten years, the Jeddah Food Cluster is expected to contribute SAR8 billion to national exports and add SAR7 billion to the nation’s GDP. MODON plans to achieve these goals by investing in cutting-edge infrastructure, shared services, and innovative strategies. By streamlining services and optimizing supply chains, the cluster aims to lower operational costs by 5 to 12 percent. This reduction will not only benefit businesses but also play a crucial role in enhancing national food security and self-sufficiency in vital commodities.
Strategic developments in food manufacturing
In February 2024, during a panel discussion at the Gulfood event in Dubai, Abdulrahman Alromaizan, investment development director at MODON, highlighted the organization’s efforts to decrease dependency on imported supplies. He shared that Saudi Arabia intends to establish multiple food clusters to strengthen its domestic food manufacturing sector. MODON currently oversees 36 industrial cities throughout the country.
Future plans for clusters
Alromaizan mentioned plans to launch 11 clusters, including one in Jeddah, which will host manufacturers, service providers, logistics services, laboratories, and pre-built facilities aimed at enhancing the efficiency of the factories within the cluster. He explained that food clusters are designated areas focused on increasing domestic production and fostering integration and collaboration among all stakeholders along the supply chain. These clusters are established to improve food security and support the broader industry.
Read more: Saudi reveals high levels of food self-sufficiency
Cost reduction and efficiency
Alromaizan also expressed expectations of a cost reduction per product ranging from 5 to 12 percent through streamlining the logistics chain and offering integrated services within the cluster. According to Razan Alaqil, partner and chief advocacy officer at the consultancy firm Mukatafa, the private sector is central to transforming Saudi Arabia’s food processing industry.
National industrial strategy goals
The National Industrial Strategy of Saudi Arabia, which was launched last year under the Council of Economic and Social Affairs, aims to boost the manufacturing sector’s contribution to the national GDP to over SAR895 billion (approximately $238.6 billion) by 2030. Moreover, Alaqil emphasized that there is a significant national focus on food processing.
Commitment to localization
Additionally, Saudi Arabia’s Ministry of Environment, Water and Agriculture (MEWA) announced plans last year to localize 85 percent of the country’s food industry by 2030. Dr. Ali Al-Sabhan, supervisor general of the Entrepreneurship Department at MEWA, indicated that food imports cost Saudi Arabia SAR70 billion annually. Alaqil further stated that the Saudi government and public sector are committed to ensuring that the private sector plays an active role in development and in building a sustainable future.
