Saudi Arabia Launches Second Phase of Industrial Incentives Program
Saudi Arabia has initiated the second phase of its industrial incentives program to attract high-value investments and enhance the nation’s trade balance, according to Khalil Ibn Salamah, His Excellency the Deputy Minister of Industry and Mineral Resources for Industrial Affairs. Announced at the Saudi Industry Forum in Dhahran, this phase is part of broader efforts to establish the Kingdom as a major industrial center regionally and internationally.
The program, which has already drawn over 1,000 interested investors, offers direct grants and financial support targeting factories that produce essential goods not yet manufactured locally. Eligible investors may receive up to 50 million Saudi riyals or 35 percent of their investment value, whichever is higher, as reported by the Saudi Industry Forum.
Role of the Private Sector and Industrial Zones
His Excellency Khalil Ibn Salamah highlighted the critical role of the private sector in advancing the National Industrial Strategy, which seeks to expand domestic manufacturing, diversify the economy, and empower small and medium-sized factories with advanced technologies. Currently, Saudi Arabia oversees 61 industrial cities, including those managed by the Saudi Authority for Industrial Cities and Technology Zones (MODON), the Royal Commission for Jubail and Yanbu, and the Special Economic Zones Authority. These zones cover more than 2 trillion square meters, with infrastructure investments exceeding 31 billion Saudi riyals, according to official data.
Saudi Arabia is monitoring more than 1,900 industrial projects, amounting to 380 billion Saudi riyals in investments, nearly half of which are located in the Eastern Province. Conversion industries are projected to contribute 30 to 40 percent toward the targets of the National Industrial Strategy. The “Wafrah” program has also led to a 40 percent growth in local polypropylene consumption and aims to expand further by including 20 new materials by 2025 in collaboration with the Ministry of Energy.
Focus on the Chemicals Sector
The chemicals sector remains a central focus. His Excellency Fahad Al-Jubairy, Assistant Deputy Minister for Sectoral Strategies and Regulation at the Ministry of Industry and Mineral Resources, stated that this sector is expected to account for more than half of the National Industrial Strategy’s projected economic impact by 2035, according to statements at the forum. Plans include multiplying specialty and downstream chemical production four to five times, and increasing basic and intermediate chemical output by over 12 million tons annually over the next decade. Growth in this sector is anticipated to boost job creation, competitiveness, and investment opportunities, especially for small and medium-sized enterprises.
New Industrial Complexes and Strategic Partnerships
The forum also saw the inauguration of two new industrial complexes in the Eastern Province, aimed at strengthening local industry and export capabilities. A strategic partnership was announced to establish the Kingdom’s first tinplate manufacturing plant, in cooperation with China’s Shanghai Donghexin Group and the National Industrial Co. Additionally, MODON signed several major agreements, including:
- a 40 million Saudi riyal contract with Abdullah Al-Shuwayer Sons Heavy Metal Industries
- a 35 million Saudi riyal lease with Al-Sharq Polystyrene Factory
- a 20 billion Saudi riyal investment deal with Al Marje Al Hayawi Co. Ltd.
according to forum reports.
In summary, Saudi Arabia’s ongoing industrial initiatives are designed to drive economic diversification, increase local production, and position the Kingdom as a leading global industrial hub.
