In a detailed conversation with Phil Daniell, Honeywell’s vice president and general manager of Building Automation for the Middle East, Turkey, and Africa, we explored the company’s aggressive expansion plans in Saudi Arabia, including the unveiling of a new facility in Dhahran.
Daniell offered insights into Honeywell’s strategic view of Saudi Arabia as a central market in its global plans, noting the company’s customized strategies to harness local prospects and government-driven incentives.
Furthermore, Daniell discussed how Honeywell Building Automation is set to benefit from Saudi Arabia’s economic reforms under Vision 2030, stressing the importance of the region and the crucial role of local collaborations in fostering growth and innovation.
What is driving Honeywell’s quick expansion into the Saudi market?
Honeywell perceives Saudi Arabia as an independent market with its own leadership, strategy, and operational approach. The country’s vision of economic diversification through Vision 2030 presents opportunities in infrastructure, clean energy, and technology—sectors where Honeywell has established strengths.
The rising demand in key areas like smart cities and energy efficiency aligns with Honeywell’s expertise, while local partnerships ease market penetration, ensuring the company’s services resonate with the nation’s developmental objectives.
What makes Saudi Arabia an appealing investment destination?
Three primary initiatives make Saudi Arabia attractive for investments:
- Special economic zones (SEZs) offer reduced taxes, customs exemptions, and flexible foreign employment regulations.
- Long tax holidays for regional headquarters, including up to 30 years of zero income tax and no withholding tax on outward payments.
- Customized financial and non-financial incentives from the National Investment Committee, such as fee reductions, relaxed Saudisation mandates, and low-interest financing support.
These incentives align with Saudi Arabia’s efforts to diversify its economy and attract significant foreign investments by creating a favorable business climate.
Insights into the Saudi building automation sector
The Saudi building automation system market, valued at $1.5 billion in 2022, is expected to grow to $3.3 billion by 2030, with a compound annual growth rate (CAGR) of 10.2% from 2023 to 2030. This growth is driven by a focus on energy efficiency, technological advancements, and regulatory backing.
The sector includes facility management systems, security and access control, and energy management systems—all contributing to the market’s expansion.
Can Saudi Arabia scale production capacity?
Yes, thanks to its strategic location conducive to global trade, government-led initiatives for infrastructure improvement, SEZ development, and abundant energy resources ensuring cost-effective operations. Investments in technology and infrastructure also augment the nation’s manufacturing capabilities, making it a prime location for industrial growth.
Is sourcing local talent in Saudi Arabia straightforward?
Honeywell’s workforce in Saudi Arabia boasts a significant proportion of local talent, with half of the Saudi-based employees being nationals, and a quarter of these being women, many of whom are engineers working on major projects.
The company invests in local talent development, supports the IKTVA Program to enhance local industries, and collaborates with academic institutions to nurture engineering talent.
Why choose Dhahran for Honeywell’s new facility?
Dhahran’s strategic location near major energy markets, robust industrial infrastructure, and proximity to educational institutions like King Fahd University make it an optimal choice for Honeywell’s assembly line facility, which also benefits from the supportive business incentives provided by the Saudi government under Vision 2030.
Production capabilities of the new Dhahran facility
The Dhahran site, spanning 1,500 square meters, will focus on assembling fire alarm and building management solutions. Plans for broader product offerings are in the pipeline to serve both local and regional markets.
Honeywell’s manufacturing footprint in Saudi Arabia
Honeywell is constructing its eighth facility in the country at the King Salman Energy Park, which will consolidate the company’s manufacturing and assembly operations for a wide range of products, enhancing its regional presence.
