Manufacturing Sector in Saudi Arabia

Saudi Arabia's manufacturing sector has improved significantly since 2016. There has been a 60% increase in industrial establishments, with the number of facilities soaring from 7,206 to 11,549 by 2023. Riyadh leads this industrial renaissance with 4,502 factories, followed by the Eastern Province and Makkah.

With investments in factories reaching a staggering $410 trillion by January 2024, confidence rises that the sector will continue its transformative momentum and reshape the nation's economic landscape, positioning Saudi Arabia as the region's industrial powerhouse.

Growth of the Manufacturing Sector in Saudi Arabia

• SR895 billion GDP contribution by 2030
• $148.4 billion export value by 2030
• 127 international firms relocated HQs to Saudi Arabia
• 11,672 operational factories as of January 2024
• $25.9 billion annual growth from the logistics sector alone

Global Manufacturing Giants Reaping the Benefits In Saudi’s Thriving Economy

IBM

Leading the AI revolution in Saudi manufacturing, IBM has established a major software development lab staffed predominantly by Saudi talent. Their work includes the development of Watsonx and numerous patents, contributing to an expected AI-driven economic impact of $135 billion by 2030.

SAP

Committed to Saudi Arabia's digital transformation, SAP has launched the region's first Innovation Hub and opened an SAP Experience Center in Khobar. Their Academy of Engineering program, in partnership with the Ministry of Communications and Information Technology, has been extended to 2025.

Microsoft

Stimulating technological advancement through a landmark partnership with the Saudi Ministry of Investment, Microsoft is bringing over 70 technology partners to the Kingdom. The company is building a cloud data center in the country that aims to accelerate the adoption of AI, cloud computing, and IoT in manufacturing.

Mitsubishi Electric

Hyundai made history with a $500 million investment and is now establishing the first South Korean automobile factory in the Middle East through a strategic partnership with the Public Investment Fund (PIF). The state-of-the-art facility will produce 50,000 electric and gas-powered vehicles annually, marking a significant step toward Saudi Arabia's goal of manufacturing 300,000 cars annually by 2030.

Empowering Industrial Growth Through Saudi’s Vision 2030

Under the framework of Saudi Vision 2030, the Kingdom has launched many initiatives to accelerate manufacturing growth and enhance industrial processes.

The Saudi Industrial Development Fund (SIDF), for example, has provided over SR180 billion in loans to more than 4,000 projects, catalyzing total investments of approximately SR700 billion. However, the government's commitment extends through many other innovative programs, like Tanafus, which supports local manufacturers, and the Sanea initiative, which empowers small and medium-sized enterprises.

The Green Finance initiative marked a significant step toward sustainable manufacturing, helping industries adopt advanced technologies and digital solutions. At the same time, the Federation of Saudi Chambers of Commerce introduced innovative services, including an industrial platform and app that streamlined access to services and incentives for manufacturers.

As a result, in early 2024 alone, 410 new industrial licenses were issued, 505 factories began production, and 11,434 new jobs were created. This momentum, coupled with private sector investments more than doubling in Q1 2024 to surpass SR7 billion, shows the Kingdom's dedication to industrial excellence and economic diversification.