Türkiye-Saudi Arabia Construction Forum: Where Do Opportunities Lie in Saudi’s Construction Sector?
Saudi and Turkey Strengthen Ties: The Saudi construction sector, boosted by Vision 2030, opens significant opportunities for Turkish contractors, enhancing bilateral cooperation and driving regional economic growth.
Saudi Arabia is the second-largest market in the Gulf and the seventh globally for Turkish contractors, having so far undertaken around 100 projects in the Kingdom.
Over the past years, bilateral relations between Saudi Arabia and Turkey have gone from strength to strength, with a focus on strengthening mutually beneficial cooperation in the areas, namely construction, as a key pillar of economic growth in both countries.
The recent Türkiye-Saudi Arabia Construction Forum and its accompanying workshop, held last week in Istanbul and organized by the Saudi Contractors Authority (SCA), represented a key step towards enhancing cooperation in infrastructure construction as the two countries are willing to actively push forward trade, connectivity and economic investments.
Saudi-Turkey Increased Synergies in Construction
The Forum's aim was to connect construction companies from both countries and form bilateral partnerships, which means both sides will be closely aligned with each other's development strategies. One stark example of this is
The Forum served as a platform for Turkish companies to explore potential collaborations with their Saudi counterparts, showcasing opportunities in several areas. This includes real estate development, road infrastructure, waste management, and recycling sectors in Saudi Arabia.
This highlights a shared economic interest, especially in the field of construction, and demonstrates the Kingdom's commitment to maintaining its stature as a hub for private sector investments, a key area of focus of Vision 2030.
Nationwide, the growth of private sector investments has been the defining storyline of the Saudi nation's march towards a diverse economy and dynamic growth. The positive momentum extends well into 2024, as the country's non-oil activities are expected to increase by 3.6% in 2024 and 3.5% in the medium term, leading the Kingdom to be the largest contributor to the Gulf region's GDP and significantly driving the growth of its non-oil economy.
With the private sector thriving in the Kingdom, strengthening cooperation between Turkish and Saudi construction companies is bound to set new standards for fostering development in both countries and the region as a whole.
This was further emphasized during the Türkiye-Saudi Arabia Investment and Business Forum which took place last February in Istanbul, where around 27 agreements were signed between Turkey and Saudi Arabia, with the vast majority focusing on areas related to construction and tourism.
Saudi Construction Sector Driving Growth in Regional Economy
Since its introduction in 2016, Vision 2030 has caused excitement to ripple across the construction industry; since then, Saudi Arabia has been actively on course to become the largest construction site in the world, igniting fresh possibilities and fueling investor and business confidence in the country's future-proof economy.
This surge is mainly driven by substantial investments in transportation, energy, sustainable energy, real estate, and tourism projects as stipulated in Vision 2030. Optimism remains palpable in the sector as preparations are afoot nationwide in anticipation of the Riyadh Expo 2030 and Fifa World Cup 2034.
The last edition of the World Cup, held in Qatar, has attracted major Turkish players such as Tafkeen Construction, which was part of a joint venture with Qatar's Aljaber Engineering. Both companies were awarded the main construction contractor for a 40,000-seat Al-Thumama stadium in Doha. The coming edition, hosted by the Kingdom, will likely spawn similar opportunities linked to sports facilities for Turkish contractors looking to be part of this grand undertaking.
Construction has the biggest role to play in the Kingdom’s strategic approach to fuel a diverse economy, which is the largest in the region and set to be the second fastest growing in 2025. Currently, the Saudi construction sector boasts over 5,200 projects worth a combined value of $819 billion.
The meteoric rise of investment and construction fueled by government support, technological advancements, and a focus on sustainable practices opens the door for promising cross-border opportunities. The Türkiye-Saudi Arabia Construction Forum remains a stark example of how the impact of the growth witnessed in the Saudi construction space can reverberate into the wider global economy as well.
Opportunities Abound for Turkish Companies in Saudi Construction Space
The increase in the number and value of projects in Saudi Arabia is attracting substantial amounts of foreign capital into the market, leading to a strong and dynamic construction set to be worth $181.5 billion by the end of 2028. This marks an increase of a whopping 30% from 2023 levels. The backbone of this construction resurgence lies in the large-scale developments, including giga projects, each exceeding billions of dollars in investments, including Amaala, Red Sea, NEOM and Diriyah Gate, among others.
All these factors suggest that the market is poised for further expansion and that the Kingdom is rapidly becoming a favorable destination for international business expansion, with AstroLabs being a key player in bringing 650 high-growth companies to the Saudi market and achieving a complete soft landing. As opportunities accelerate in the construction sector, international companies Grankraft like Waagner Biro for Steel and Glass has recently expanded to the Kingdom and set up their Riyadh headquarters with the help of AstroLabs’ on-ground team.
The dramatic surge in the Kingdom’s urban development activity spills over into the entire economy, creating a profound narrative of growth that resonates across other sectors as well. The premise was underpinned in the Türkiye-Saudi Arabia Construction Forum, which is expected not only to power domestic economic growth but also to pave the way for a new phase of industrial innovation while contributing to boosting economic cooperation between the two nations.
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