What role is the Industrial Valley of King Abdullah Economic City (KAEC) playing in the industrial revolution of Saudi Arabia?
The first and most important initiative to achieve KAEC's vision of becoming a regional industrial and logistics hub is King Abdullah Port, which seeks to capitalize on 13% of world trade passing through the Red Sea. Having one of the deepest ports creates new opportunities, either through industries or a logistics hub. This provides global conglomerates the opportunity to do things more efficiently by saving time and gaining accessibility. Naturally, specialization is key to providing the maximum benefit to current and potential clients, which is why we decided to focus on light industries such as pharmaceuticals, which recorded 18% growth last year, and FMCGs. Our strategy is to attract players across the whole value chain, not only manufacturers, a goal in which we are supported by the single window regulator of the Economic Cities Authority. When international companies come, they want to deal with one government agency, not several. Moreover, we built the ecosystem to work on financing by launching the Industrial Export Incentive Initiative. We also brought together three government agencies that support industry acceleration and signed an MoU for land and loans in which the Industrial Valley offers the land, the Economic Cities Authority provides the license, and the Saudi Industrial Development Fund (SIDF) provides the investor financing facility to start development.
What operational measures must be taken to attract international investors to Saudi Arabia?
There must be a comprehensive, focused approach to attract players across the whole value chain from certain industries. For example, we do not focus only on pharma manufacturing companies, but we also have packaging companies that can serve other industries too. As such, the next step will be building three specialized zones: a gas zone; a technology park to attract top data center providers; and a bonded and re-export zone valley to make high-end plastics used in automotive, biomedical, construction, and food-packaging industries. The idea is to be proactive in implementing energy services within the industrial zone, since companies usually come with specific requirements in terms of power, storm drainage, and access to logistics services, for example.
What is your assessment of the National Industrial and Logistics Development Plan, and what is the key to ensuring Saudi Arabia remains an attractive investment location?
It re-emphasizes the need for the country to leverage its location. Indeed, integration between industry and logistics is always necessary to then focus on the sectors that the country really needs and has a competitive advantage in. This approach helps investors know where to invest and comforts the players on the supply side. Technology will continue to have a crucial role in keeping these facilities up to date with international standards through the use of robotics and advanced, technology-driven logistics practices in warehouses. Naturally, growing a city of this size and ambition implies challenges, but if we attract the right business and the right talent, we will keep moving forward and start tackling other areas.