Kingdom of Saudi Arabia

The leading destination for investment in the Middle East

Kingdom of Saudi Arabia

The leading destination for investment in the Middle East

Contents
Saudi Arabia Milestone Achieved
1. Government Past & Current Industrialization Activities 2. Impact Witnessed

The Saudi Arabian Capabilities

3. A new Philosophy Approach 4. Capability Mix

Sharing Future Plans

5. Autozone Concept 6. Pharma Cluster 7. Human Capital Dev.

Delivering Promising Projects

Concluding Remarks

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

Contents
Saudi Arabia Milestone Achieved
1. Government Past & Current Industrialization Activities 2. Impact Witnessed

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

1.Government Past Industrialization Activities

Refinery in RasTanura commissioned

1st

Railway line was commissioned

1st

Saudi Industrial Development Fund (SIDF) Established

Economy Diversification Strategy was in place

Royal Commission for Jubail & Yanbu (RCJY) established

Saudi Arabia Basic Industries Co. (SABIC) established

1945

1951

1974

1975

1975

1976

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

1.Government Past Industrialization Activities

Approval of Forging Investment Law

Establishment of Saudi Industrial Property Authority (MODON)

Approval of North-South Line Appx. 2,750kn

Establishment of King Abdullah Economic City

Approval of the Land Bridge Appx. 1,100kn

RCJY to take RAKMIC Development

SIDF Capital increased by 100% from SAR 20 Billion to SAR 40 Billion

2000

2001

2003

2005

2006

2009

2012

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

2. Witnessed Impact on Global Level

Saudi Arabia is competitive in a global economy

23rd Largest economy in the world 17th In Gold Reserves & 1st In MENA region 16th largest exporter in the world 1st economy in the MENA region

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

2. Witnessed Impact on Global Level

US$ 14.7 billion in FDI in 2011 An increase of 42% from 2010 A 34% raise in number of projects FDI will help increase per capita income from US$ 16,423 in 2010 to US$ 23,535 by 2015*

Saudi Arabia is competitive in attracting investment

*Source: Ernst & Youngs 2012 attractiveness survey - Middle East

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

2. Global Recognition

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

Contents
Saudi Arabia Milestone Achieved
1. Government Past & Current Industrialization Activities 2. Impact Witnessed

The Saudi Arabian Capabilities

3. A new Philosophy Approach 4. Capability Mix

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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2. A holistic Approach
Labor cost: current average wages for
skills/managerial levels required

Industrial Lands with all

utilities. Ready buildings for production (SME) Ports upgrade Telecom Upgrade to improve connectivity Transportation: scale and quality of road/rail network Reliability of power supply

Infrastructure cost: unit costs for telecom network,

internet access, power and logistic Real estate: cost of class A office space Corporate taxes: scale of tax and other incentives for local investment

Overall cost Quality of infrastructure Availability of skills

Skill pool: proportion of labor

force with skills required, e.g., IT, analytical sciences etc. Training Programs Needed Partnership with best In class training providers

Government support: policy

on foreign investment, labor laws, bureaucratic and regulatory burden Business environment: include compatibility with prevailing business culture and ethics Living environment:: overall quality of life, Accessibility: travel time, flight frequency, time difference

ECO-Buiss. Environment

Market potential

Risk profile

Attractiveness of local
market: current GDP and GDP growth rate Access to markets

Disruptive events: risk of labor uprising, political unrest, natural disaster Security: risks to personal security, property and from terrorism Regulatory risk: stability/fairness/efficiency of legal framework Country risk: macroeconomic indicators Intellectual property risk: strength of data/IP protection regime
NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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4. Capability Mix to Investor

Business Essentials

Good Infrastructure

Selection of Location

Attractive Loan Schemes

Raw Maw Materials

Good Base of Industries

Manpower Training

Business Needs
Reliable Utilities Supplies

Training Facilities

Specific Incentives

Business Extra

R&D Support

Access to GCC and GAFTA Markets

Protection to Investor

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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4. Industrial Finance

Since inception, the Fund supported more than 640 Joint-Ventures.

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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4. Human Capital
Academic type
Universities Vocational Training Technical Colleges

No.
35 162 50

2012 Graduates
170,000 42,000 33,000

2020 Estimated
490,000 130,000 55,000

150,000 Saudis students are studying abroad under King Abdullah scholarship program which has been extended for another 5 years from 2013. This represents the largest abroad scholarship program among the world.
Source: TVTC and Ministry of Higher Education, 2012.
NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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Contents
Saudi Arabia Milestone Achieved
1. Government Past & Current Industrialization Activities 2. Impact Witnessed

The Saudi Arabian Capabilities

3. A new Philosophy Approach 4. Capability Mix

Sharing Future Plans

5. Autozone Concept 6. Pharma Cluster 7. Human Capital Dev.

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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5. The Autozone Concept

The Saudi Autozone is the first innovative automotive zone concept designed from scratch to deliver bottom line results by: Improving operational efficiency Reducing capital expenditures requirements from investors Supporting rapid development of the supplier base

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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6. The Pharma Cluster Concept

Vaccines production Self sustainability Vaccines Institute Stepping Stone Towards Knowledge Economy Know- how will be useful for entry into biosimilars Sterile Injectables Stepping Stone Towards Knowledge Economy Ensure local supply of critical and high cost medications (e.g. oncology drugs) Big bet knowledge economy Position Saudi to become a Global biologics/Biosimilars Biologics / player in line with Future Biosimilars industry trends Becoming a regional powerhouse

Prepare for Future Pandemic - Supplier for the Region

Self sustainability

Plasma Self-sufficiency in producplasma used for tion intensive care, rare diseases and immunology

Integration Satisfy local manufacturing as well as export niche APIs

APIs
Solid Oral Dosage hub

Global Gx footprint being reorganized in line with shift of growth towards emerging economies window of opportunity closing

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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7. Human Capital

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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Contents
Saudi Arabia Milestone Achieved
1. Government Past & Current Industrialization Activities 2. Impact Witnessed

The Saudi Arabian Capabilities

3. A new Philosophy Approach 4. Capability Mix

Sharing Future Plans

5. Autozone Concept 6. Pharma Cluster 7. Human Capital Dev.

Delivering Promising Projects

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

19

8. Promising Conversion Base

Aluminium Project Maaden Alcoa JV
US$10.8 billion Investment JV signed : Dec 2009 25 months construction. SOP: Dec 2012 The Rolling Mill project SOP is Dec 2013. Today more than 700 Saudis have completed intensive training and are on the job as operators at the smelter. The project has 1,409 employees of which 987 are Saudis. Main contractor (Bechtel) and its team of 46 different subcontracting companies have employed labor and expertise of about 14,000 people from 25 different nationalities. They have worked almost 60 million hours with world-class safety performance.
NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

SADARA Project Aramco & Dow Chemical JV

US$20 billion Investment JV signed: Oct 2011 Under construction SOP: Jun 2015

Sadara has already recruited over 500 Saudi apprentices who are now undergoing comprehensive and competitive manufacturing and engineering training programs, in state-ofthe-art training centers both inside and outside of the Kingdom of Saudi Arabia.

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8. 1st Seed in Creating the Pull factor

Isuzu Saudi Arabia
Key project targets: 100% FDI 25,000 trucks after wrapmp up 4,500 direct jobs vehicle manufacturing plant, and key & main local suppliers plants 40% of the volume targeted to MENA market

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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8. Building Momentum in Car Making

Jaguar Land Rover Project
Key project targets: 44,000 per year Land Rover sport utility vehicle 3 key supplier projects and 12 main suppliers 4,500 direct jobs vehicle manufacturing plant, and key & main local suppliers plants 30% of the volume targeted to MENA market 2017 start Completely Built vehicle Unit (CBU) production (2015 start Knock Down operations, xKD) Creation of an Automotive Cluster If successful, Land Rover to become the 1st car manufactured in Saudi Arabia
Picture for illustration only - not the intended model

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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8. Stepping into Knowledge base Economy

Sanofi-Aventis KAEC Project
Key project targets: 100 % FDI foreign direct investment 35,000 square meter land Oral antidiabetic and cardiovascular Products

Arabnews, Monday 10 December 2012

We are proud that this pioneer project is the first of its kind in the Kingdom and the Gulf Area that offers world-class treatment solutions. In fact, the encouraging investment environment and the solid economic situation in Saudi Arabia have had a conclusive effect on our decision to go ahead with this project. Sanofis SVP for industrial affairs
NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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Contents
Saudi Arabia Milestone Achieved
1. Government Past & Current Industrialization Activities 2. Impact Witnessed

The Saudi Arabian Capabilities

3. A new Philosophy Approach 4. Capability Mix

Sharing Future Plans

5. Autozone Concept 6. Pharma Cluster 7. Human Capital Dev.

Delivering Promising Projects

Concluding Remarks

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

24

Concluding Remarks
Japanse Buisnessmen and Investment are welcomed to Saudi Arabia Government has and will continue to support diversification with the support of its strategic parnter. economic

The JTF over the past five has contributed to the scussful attraction of key investment to saudi arabia from Japan. New buisness opprtunities in Automotive and Pharmaceutical are now flourishing and Japanese Investor are encourged to consider participating in them to support govement plan over the next 5-10 years.

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa

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The leading destination for investment in the Middle East

Invest in Saudi Arabia

NICDP National Industrial Clusters Development Program January 2013 www.ic.gov.sa