Saudi Arabia has unveiled the second phase of its standardized industrial incentives program to boost competitiveness and improve the Kingdom’s trade balance. The announcement was made by Khalil Ibn Salamah, Deputy Minister of Industry and Mineral Resources for Industrial Affairs, at the Saudi Industry Forum in Dhahran.
The program is part of Saudi Arabia’s drive to position itself as a leading regional and global industrial hub. Since its initial rollout, it has attracted more than 1,000 investors, with 118 applications submitted and 12 advancing to the final qualification stage.
“I am pleased to announce the launch of the second batch of standardized incentives under this transformative program,” Ibn Salamah said, noting that investors can begin applying for these incentives in early August.
Described as one of the most significant initiatives in the Kingdom’s industrial development, the program offers support beyond traditional financing, including direct grants for factories producing critical goods that are currently imported.
Eligible investors can receive up to USD 13.3 million or 35% of their total project value—whichever is higher.
Ibn Salamah emphasized that collaboration with the private sector is central to delivering the goals of the National Industrial Strategy, which seeks to expand domestic production and diversify the economy.
“Our partnership with the private sector has been a cornerstone of this strategy, and it continues to grow to ensure we meet our national industrial ambitions. Industrial investors remain essential partners in our development journey,” he said.
Saudi Arabia currently manages 61 industrial cities. Of these, 37 are overseen by the Saudi Authority for Industrial Cities and Technology Zones (MODON), 18 are private and integrated industrial zones, and another 4 are managed by the Royal Commission for Jubail and Yanbu. Special Economic Zones, including OXAGON in NEOM, also contribute to this landscape.
These zones span over 2 trillion square meters, with more than 500 million square meters already developed or under development. Infrastructure investments have surpassed USD 8.3 billion, with returns estimated at 8–12 times for every dollar spent.
“This program has already delivered positive impact this year and will continue to do so in the coming years,” Ibn Salamah noted.
Saudi Arabia is currently supervising more than 1,900 industrial projects with total investments of USD 101 billion, nearly half located in the Eastern Province.
Conversion industries are expected to account for 30–40% of the National Industrial Strategy’s overall targets, reflecting their vital role in broadening the Kingdom’s industrial base.
Ibn Salamah also highlighted the “Wafrah” program’s success in driving local polypropylene consumption, with growth exceeding 40% and utilization rates at 27%. By 2025, 20 additional materials are expected to be added, further expanding downstream industries.
Built around four strategic enablers supported by over 140 initiatives, the National Industrial Strategy focuses on maximizing natural resource value, securing raw material supply, boosting exports, and developing specialized industrial clusters. It also aims to empower small and medium-sized factories through advanced manufacturing technologies.
Chemicals Sector as a Growth Driver
During a panel session, Fahad Al-Jubairy, Assistant Deputy Minister for Sectoral Strategies and Regulation, noted that the chemicals sector is a cornerstone of the economy and is expected to deliver over half of the National Industrial Strategy’s total projected impact by 2035.
“The chemicals sector is one of our most critical focus areas due to its transformational economic potential,” he said.
Saudi Arabia aims to multiply specialty and downstream chemicals output by 4–5 times and increase basic and intermediate chemicals production by over 12 million tons annually over the next decade.
Al-Jubairy stressed that chemicals are essential to developing industries like automotive, aviation, construction, and advanced materials—all benefiting from locally produced value-added chemicals.
“The sector’s growth will reinforce the Kingdom’s global leadership in petrochemicals and position Saudi Arabia among the world’s top economies,” he said.
New Industrial Projects and Partnerships
Several new initiatives were announced to accelerate industrial growth and localization. Two industrial complexes were inaugurated in the Eastern Province—one in Dammam Third Industrial City to improve service integration, and another in Jubail Second Industrial City targeting high-value investments in chemicals.
A strategic partnership will also establish Saudi Arabia’s first tinplate plant through collaboration between National Industrial Co. and Shanghai Donghexin Group.
MODON signed key agreements, including:
A USD 10.6 million contract with Abdullah Al-Shuwayer Sons Heavy Metal Industries
A USD 9.3 million lease with Al-Sharq Polystyrene Factory
A USD 5.3 billion investment agreement with Al Marje Al Hayawi Co. Ltd.
“This momentum underlines Saudi Arabia’s determination to build a diversified, globally competitive industrial sector anchored in innovation,” Ibn Salamah concluded.
Source: Arab News
