Saudi Arabia: from fossil fuels to manufacturing
Saudi Arabia is expanding its reach in the manufacturing sector with its Vision 2030 plan, as the country shakes up its economy from being reliant on oil and looks forward to becoming net zero by 2060.
Saudi Arabia’s manufacturing goals
Saudi Arabia is situated in the Arabian Peninsula and is home to the world's largest proven oil reserves, which has transformed the country’s economy since its discovery by Chevron in 1938. It is estimated that there is 221 years of oil left (at current consumption levels). But as the world turns its back on oil, the country is looking for another way to build its economy.
Saudi Arabia is led by an absolute monarchy, the Al Saud family. Crown Prince Mohammed is dedicated to modernising his country, from healthcare to wider society. Yet the country remains under scrutiny for its poor Human Rights record - from the imprisonment of people who have Tweeted criticism about the kingdom’s laws to the murder of journalist Jamal Khashoggi.
Following the development of Saudi Arabia’s Vision 2030 plan back in 2016, Crown Prince Mohammed has promoted industry and encouraged investment in Saudi Arabia's economy, ensuring the growth of non-oil exports.
Since then, the number of factories in Saudi Arabia has increased by 50%, with over 10,000 industrial facilities in Saudi Arabia and 1,023 factories opening in 2022. That same year, the manufacturing sector was responsible for 14% of Saudi Arabia's GDP.
“The diversification of the country's oil-based economy is progressing steadily, supported by a positive economic environment and favourable investment attitudes. IT innovation spirits are rather high, as many of the new businesses are not saddled with extensive client-based solutions,” said Martin Kuban, former-lead research analyst at International Data Corporation (IDC) Manufacturing Insights, Central Europe, the Middle East, and Africa (CEMA) region. “Manufacturing in technology and engineering-oriented value chains will be driven by emerging small and medium businesses, mostly established in industrial zones surrounding big cities.”
Aerospace and defence manufacturing
Aerospace and defence company Saudi Arabian Military Industries (SAMI) has a goal to localise 50% of the Kingdom’s defence spending by 2030. The company has established 12 joint ventures with various equipment manufacturers.
SAMI has signed a strategic agreement with Baykar Tech, a Turkish defence company, to localise drone manufacturing.
“Through partnering with industry pioneers and experts, we’re making great strides,” SAMI told Arab News.
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