Manufacturing booms in Saudi Arabia

The effort to combat unemployment is nationwide. While Jubail on the Gulf coast, together with Yanbu on the Red Sea, were established as the Kingdom's main industrial locations in 1976 there has been substantial industrial expansion elsewhere.

A dozen industrial estates have been built throughout the Kingdom accommodating more than 1,600 industrial units. The largest, located in Riyadh, Jeddah and Dammam, are being expanded while a new estate is being developed in Jazan.

The number of manufacturing and industrial enterprises in the Kingdom now totals more than 3,800 and these employ 415,000 people. There is a tangible economic benefit with exports of non-oil products amounting to $21bn last year.

Jubail Industrial City

However, the core centres remain the most important generators of industrial investment. There are some 184 industries now operating in Jubail Industrial City. These include 19 primary, 21 secondary and 144 light manufacturing operations. There are also another 53 industrial projects under development as well as a further 42 in the design or planning stage.

Such has been the success of Jubail that a second industrial area is being developed over 5,500 hectares to the west of the existing complex which will eventually double the city's industrial site.

Stage one of the $5.9bn development of Jubail Industrial City-2 will be completed by the end of this year with all three stages due for completion in 2023.

The development is expected to generate foreign direct investment totalling $56bn and provide employment for 55,000 people as well as another 330,000 indirect job opportunities.

While petrochemicals and plastics production are the principal activities, a wide range of light industries and support services have developed in both cities that do not rely on hydrocarbon feedstock including the manufacture of metal products and high tech items such as catalyst protection devices.

There is still a long way to go. At present non-oil manufacturing only provides 10 per scent of Saudi GDP and less than six per cent of total employment.

Industrial expansion

A national industrial cluster development programme under the chairmanship of Prince Faisal bin Turki bin Abdulaziz has recently been established to expand the industrial base.

The strategy aims to stimulate metals processing, automotive assembly as well as production of construction materials, packaging and consumer goods, electrical and electronics goods and packaging which could attract foreign investment.

Industries requiring a level of expertise and skill, rather than low-pay labour intensive activities such as garments and textile production are the type of investments being sought.

Shalabi, who is a former Aramco executive, says the intention is to work closely with foreign companies and develop the cluster concept in areas that the investor wants to be in and seek to help provide infrastructure, utilities and other inputs including training.

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