Saudi Arabia

Market Overview

Saudi Arabia's non-oil sector has grown by 3.3% over the last 12 months and now accounts for 44% of the economy, up from 41% at the same time last year. The improving share can in part be attributed to a rapidly expanding manufacturing sector, which grew at its fastest pace on record during Q1 2021.

The fast paced growth in Saudi Arabia’s industrial sector has also been supported by strategic and precision initiatives by MODON (Saudi Arabia’s industrial real estate authority) to further grow the sector. Apart from developing and managing 36 industrial cities around the Kingdom, spread across more than 200 million sqm of developed land, MODON has started to offer new products and services, such as ready warehouses, self-storage units and financing solutions to small and medium enterprises and entrepreneurs, including ‘plug n’ play’ factories.

In addition to the 4,000 factories established in MODON-built industrial cities, the government has launched six new industrial cities and is intensively investing in state-of-the-art infrastructure to boost their attractiveness.

Saudi Manufacturing Sector Overview

The Saudi government is transforming the Kingdom’s industrial sector, with the goal of creating a leading industrial powerhouse and international industrial hub. In order to achieve this vision, Saudi Arabia’s government has launched several diversification initiatives:

Revenue in Manufacturing is projected to amount to US$182.40bn in 2022.
An annual growth rate of 4.64% is expected (CAGR 2022-2025).
Investment in Saudi manufacturing market exceeded $4bn (reported citing the minister of industry and mineral sources)
Manufacturing Production in Saudi Arabia increased 22%in September of 2022 over the same month in the previous year.

Investment plan in the manufacturing sector

Saudi Arabia is using its investment power to create a more diverse and sustainable economy. As part of Saudi Arabia’s National Industrial Strategy, authorities are planning expansions of 12 strategic industrial sectors in which opportunities have been identified for growth and increased competition at the regional and international levels.

The 12 sectors targeted for expansion are aerospace, automotive, maritime, renewables, chemicals, machinery and equipment, medical devices, pharmaceuticals, food processing, building materials, mining industries, and military industries.

Modern technology, innovation and digitization are creating disruptive transformation in the future of doing business and investments.

The Kingdom boasts cutting-edge industrial infrastructure in over 36 industrial cities across the country. The Kingdom’s emphasis on industry is an inevitable choice, as evidenced by the leadership’s support for this strategic sector

As part of its Vision 2030, the Saudi government has put plans in place to increase the country’s manufacturing and local content footprint. This is where the objectives of the Saudi government.

Saudi Arabia’s industrial sector can expect boost into 2023

The Saudi Ministry of Industry and Mineral Resources reports that the kingdom has been accelerating its economic diversification efforts.

The Saudi Ministry of Industry and Mineral Resources (MIMR) issued in August 2022 its Monthly Bulletin for Industry and Mining covering the first half of 2022, highlighting the latest development in the industrial sector. The bulletin states that 501 industrial licenses have been issued since the beginning of 2022, mainly focused on the manufacturing of steel, food, polymers and chemicals. Saudi Arabia has been accelerating its economic diversification efforts since the dual shock of COVID-19 and low oil prices in 2020.

Although the number of new licenses has declined slightly from the 529 registered in the first half of 2021, the number of factories that commenced operations more than doubled, from 303 to 721, during the same period. Additionally, investments into existing factories or manufacturing plants in Saudi Arabia (10,675 factories) has increased by 42% YOY in H1 2022.

The Saudi Arabia Industrial Automation Market is projected to Grow at a CAGR of 4.1% during 2020-26

Saudi Arabia industrial automation market is anticipated to show a significant growth in the coming years owing to the Saudi Arabia National Industrial Development and Logistics Program, which seeks to attract an investment of around $427 billion in the Kingdom by 2030, majorly in four domains such as manufacturing, mining, energy, and logistics. Additionally, the “industrial revolution 4.0” initiative would help in powering industrial automation by increasing manufacturing productivity which in turn would drive the demand for industrial automation in the Saudi Arabian market.

According to this research, the Saudi Arabia Industrial Automation Market is projected to grow at a CAGR of 4.1% during 2020-26. By-products, robotics is anticipated to dominate the market growth in the coming years as they play a vital role in the manufacturing industries due to their utility in controlling and managing processes along with their advanced networking capabilities. However, other segments bagged the highest share in revenues of Saudi Arabia's industrial automation market share.

The oil and gas vertical is set to dominate the industrial automation market in terms of revenues during the forecast period. Saudi Arabia is the world’s largest exporter of oil and the oil industry accounts for 43 percent of GDP. Additionally, the power utility & water treatment and chemical sector show the most promising growth during the forecast period on account of growing investment in such verticals.