State of the Industry2012/02/02  · Saudi Arabia’s Economy Saudi Arabia’s Economy 2011 Source : Central Department of Statistics & Information National GDP $577 (in Billion USD)

MODON

Saudi Industrial Property Authority

Tokyo, Japan Jan 31 - Feb 2, 2012

Outline

• Saudi Arabia’s Economy

• Japanese - Saudi Investments Partnership

• National Industrial Strategy Vision & Objectives

• MODON in Brief

• Investment Incentives

• Our Clients

• Our Industrial Cities

• MODON’s Supply Chain Projects

• MODON’s Infrastructure Projects

Saudi Arabia’s Economy

Saudi Arabia’s Economy 2011

Source : Central Department of Statistics & Information

National GDP

$577 (in Billion USD)

Per Capita GDP

$20,328 (USD)

GDP growth

6.77%

Industrial sector growth

28.27% Export growth

35.73% Import growth

1.45%

Contribution of exports

to GDP 61.6%

Saudi Arabia’s Economy

Gross Domestic Product by sectors at Current Prices (Billion USD)

Source : Central Department of Statistics & Information

0

50

100

150

200

250

300

350

2007 2008 2009 * 2010 * 2011

Oil Sector

Non- Oil Sector

Saudi Arabia’s Economy

Gross Domestic Product sectors breakdown at Current Prices (Billion USD)

Source : Central Department of Statistics & Information

0

50

100

150

200

250

300

350

2007 2008 2009 * 2010 * 2011

Oil Sector

Private Sector

Govt. Sector

Industrial Sector

Saudi Arabia’s Economy

Gross Domestic Product of the Industrial sector at Current Prices (Billion USD)

Source : Central Department of Statistics & Information

0

5

10

15

20

25

30

35

40

2007 2008 2009 * 2010 * 2011

Saudi Arabia’s Economy

Saudi Industrial Development Fund (SIDF) Loans (Million USD)

Source : SIDF

0

500

1,000

1,500

2,000

2,500

3,000

2006 2007 2008 2009 2010

Number of Companies

50+ Started from mid 70’s

Total Investments

$2,5+ Billion USD

Petrochemical, Chemical, Water & Energy, and Services

Largest Investment

$1,5 Billion USD

Petro Rabigh

Latest Investment

ISUZU Motors Ltd.

1

2

3

4

Japanese - Saudi Investments Partnership

Source : JETRO - Riyadh

Japanese - Saudi Investments Partnership

Japanese - Saudi Investments By Decade (Million USD)

Source : JETRO - Riyadh

T

A

R

G

E

T

E

D

Vision

"A globally competitive industry, based on innovation and acting as a major tool in

transforming national resources into sustainable wealth"

Key strategic goal

"To increase the contribution of the manufacturing sector to the GDP

to 20% … "

"Manufacturing is our strategic choice to diversify the economy"

Source: KSA National Industrialization Strategy document, Factiva

NIS, manufacturing identified as a key development sector Goal is to diversify away from oil and gas and develop human capital

NIS strategic goal to be achieved by reaching four targets

Four targets help reach strategic goal of 20% manufacturing contribution by 2020 Four targets are interrelated

GDP 3x

Increasing manufacturing GDP threefold

Manufacturing Saudization

-> 30%

Increasing share of Saudi labor in manufacturing to

30%

Share of tech man products

-> 60%

Increasing share of "technology"/value add manufacturing products

to 60%

Share of exports in man

-> 35%

Increasing share of exports revenues versus domestic

revenues to 35%

Grow Man. GDP

1

2

3

4

1

Employment

Saudi employment

More export oriented sectors

More value add sectors

3 4

More Saudi involvement "nice jobs"

More Saudi involvement "int'l jobs"

More jobs

More jobs for Saudis

2

Source: KSA National Industrialization Strategy document; BCG analysis

Eight improvement axes identified to achieve NIS targets

Description NIS axes

• Improve macro-economic policies (i.e., monetary and fiscal policies, wages) • Stabilize micro-economic indicators (to attract local and foreign investments) • improve trade policies and market competition

Overall business environment

• Stimulate industrial diversification and achieve balanced development • Important factors behind industrial development • Stimulate innovation and development by sharing skills

Industrial complexes

• More attention should be devoted to SMEs (i.e., industrial SMEs support, industrial SMEs incubation, business resources center, competitiveness development and industrial modernization center, industrial financing mechanisms)

Business community and SMEs

• Link R&D efforts with development processes (i.e., linking science and technology network with innovation in industrial companies, linking educational output to labor market needs)

• Promote innovation in small and medium scale industrial facilities

Industrial innovation and productivity

• Ensure the availability of technically and scientifically qualified and well-trained resources • Train personnel to deal with, develop, and maintain modern machinery and equipments

HR development

• Develop infrastructure in the traditional industrial regions and the new industrial cities/zones • Enhance provision of industrial services and supportive activities (i.e., handling, shipping, storage)

Infrastructure and logistics support

• Move the Kingdom towards higher technology-content industries • Provide continuing support for the development of existing industries which have earned

successful comparative and competitive advantages (i.e., petrochemicals)

New industry verticals

• Manage the implementation of NIS Governance mechanism

1

2

3

4

5

6

7

8

Source: NIS; BCG annalists

MODON in Brief

• History Established in 2001

Independent, self-funded public organization

• Roles Regulate, develop and promote industrial properties

and technology zones

• Facts Overseas 75 million m2

34.5 million m2 developed during the last 3 years

86% growth of land developed now VS. 40 years ago

300,000 Employees

3,000 factories

MODON in Brief

Increase Industrial Lands to 150 million m2 in 2015

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Investment Incentives

Competitive Advantages

State of the Art Infrastructure

Largest Market in ME

One Stop Shop

Housing & Commercial Centers

Competitive Leasing Rates in GCC

Industrial Cities around KSA

Incentives

Starting from

¢27 / M2 / year

Subsidized electricity rates

Tax exemption (for equipments & raw

materials)

Government financing up to 75%

Export Financing Program

Human Resources Support Program

Our Clients - Local

Our Clients - International

Existing Industrial Cities

1. Riyadh 1

2. Riyadh 2

3. Jeddah 1

4. Jeddah 2

5. Dammam 1

6. Dammam 2

7. Makkah

8. Madinah

9. Qaseem

11. Al- Ahsa

11. Assir

12. Al- Jouf

13. Tabuk

14. Hail

15. Najran

16. Jazan

17. Rabigh

18. Al-Kharj

19. Ar’ar

Existing Industrial Cities

Existing Industrial Cities

Cities Under Development

1. Riyadh 3

2. Jeddah 3

3. Dammam 3

4. Sudair

5. Qaseem 2

6. Al-Zulfi

7. Shaqra

8. Hafer Al-batin

9. Al-Baha 1

Existing Industrial Cities

Existing Industrial Cities

Existing Industrial Cities

Existing Industrial Cities

Existing Industrial Cities

Cities Under Planning

1. Jeddah 4

2. Salwa

3. Al-Baha 2

4. Military Industries Complex (Al Kharj)

1200

1000

800

600

400

200

0

MODON Number of Factories

Category #

Existing 19

Under Development 9

Under Planning 4

Factories 3,000+

Labor 300,000+

MODON in Numbers

Electronic Services

• Electronic Services

Sadad

PMS

E-MODON

GIS

MODON’s Supply Chain Projects

–3PL

–Containers terminal

–Dry Port

–Rail freight

MODON’s Infrastructure Projects International Codes in Standard & Specification

• Roads

ASTM

AASTHO

• Utility

ACI

BS

ASA

ASCE

Infrastructure Projects during the past 4 years

Study / Survey $ 28

Development $ 480

Rehabilitation $ 72

Utilities & Services setup $ 533

Total $ 1,113

*In Million USD

Infrastructure Projects during the past 4 years

Infrastructure Projects for the next 5 years

Study / Survey $ 80

Development $ 1,333

Rehabilitation $ 266

Utilities & services Setup $ 1,333

Total $ 3,012

*In Million USD

Infrastructure Projects for the next 5 years

Thank You

www.modon.gov.sa +966920000425