Saudi Arabia’s industrial sector could prove to be an engine of growth for the kingdom. The Saudi economy is at a crossroads. A diversification and digitalization strategy are working hand in hand to wean the country from dependence on oil revenues. Still, oil production continues to fuel the country’s economic model today. It accounts for 84 percent of exports and 42 percent of the GDP.
The kingdom’s industrial sector presents an opportunity for garnering a bigger share of the economy. In 2020, the Saudi Export Development Authority launched the “Made in Saudi” program. It did so to encourage local consumers to buy more locally-made products.
The sector is often understated but it is witnessing unprecedented growth. Investments in the Kingdom’s budding manufacturing landscape have reached $132 billion since the launch of Vision 2030 in 2016.
The Kingdom has issued over 2,000 new licenses for various projects to ramp up its domestic manufacturing capacity. Some 193,000 new jobs within the industrial sector were created as a result.
Saudi mining industry
The Saudi mining industry is no slouch. It granted more than 1,300 new licenses and attracted investments worth over $32.4 billion in new investments. These were in the mining and minerals sector through nine new projects. This is according to recent data from the Ministry of Industry and Mineral Resources.
New shortlisted bidders are competing for permission to dig for valuable metals in exploration sites in Riyadh and Asir.
The Muhaddad site in Asir, located in Saudi’s southwest region, contains copper, zinc, lead, and gold deposits and covers 139 sqkms.
The Kingdom also upgraded its mining laws to attract more private players.
Mining complexes in the Kingdom rose as a result to 377 at the end of 2022, covering an area over 44,000 sqkms, government data shows.
According to Saudi Vision 2030, the country plans to make its mining sector a third pillar of the national industry. Experts estimate the Saudi mineral wealth at nearly $1.35 trillion.
The number of mining factories in the Kingdom rose 50 percent since the launch of Vision 2030. 2022 figures show Saudi operating over 10,000 industrial facilities. Over 1000 factories began operations in 2022 alone.
By 2035, the country aims to increase this number to 36,000 factories, 4,000 of which will be fully automated.
Saudi Industry 4.0
The adoption of artificial intelligence (AI) and robotics, referred to as Industry 4.0, is boosting efficiency and productivity in a drive to diversify the region away from oil.
Bahrain’s manufacturing sector expanded by almost 5 percent in 2022, the UAE’s by 8.7 percent, while Saudi’s manufacturing activity increased by 18.5 percent in December 2022 compared to the previous year.
The Raqtan Group worked with the Saudi government’s industrial property authority MODON to introduce robotic solutions and other automation processes, including AI and cloud software.
Saudi Arabia’s Advanced Manufacturing Hub Strategy has identified more than 800 investment opportunities totaling $273 billion.
Saudi Türkiye industrial relations
Saudi’s relations with Türkiye have begun a period of partnership, according to the kingdom’s Minister of Industry and Mineral Resources Bandar Alkhorayef.
“We find great opportunities for cooperation with Türkiye in food security, health, military and industrial sectors,” Alkhorayef said during a recent visit to Türkiye.
He said cooperation between Saudi and Türkiye in the aircraft industry, renewable energy, and space among others is there for the taking.
“Aircraft and defense industry and the development of aluminum for aircraft fuselages, titanium and carbon fiber, which are necessary for certain industries, are important sectors for cooperation with Türkiye,” Alkhorayef said.
“There are many other fields of cooperation as the auto industry. Saudi Arabia is moving to build an electric car manufacturing sector. The same is true for Türkiye, which manufactures car batteries.”
“The Saudi industrial strategy aims to introduce modern technologies into industry and build an industrial base on the Fourth Industrial Revolution such as the use of artificial intelligence,” he said. “Türkiye has appropriate solutions in these fields.”
Investments in industrial infrastructure, ports, logistics services, and digital infrastructure “have created a favorable environment in the kingdom for adopting the Fourth Industrial Revolution.”
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