Business Forum: Industrial Infrastructure - Dr. Tawfiq Rabiah

MODONSaudi Industrial Property Authority Atlanta

Outline • Saudi Arabia Economy • National Industrial Strategy Vision & Objectives • MODON in Brief • Investment Incentives • Our Clients • Our Industrial Cities • MODON Supply chain Projects • MODON’s Infrastructure Projects

Saudi Arabia Economy • One of the world’s 25 largest economies (23rd ) • The largest economy in the MENA region. • Represents 25% of total Arab GDP • It has 25% of worlds oil reserves • The industrial sector: 13% of the GDP. Projected: 20% by 2020. • Ranked 4th world wide for fiscal freedom.

NIS, manufacturing identified as a keydevelopment sectorGoal is to diversify away from oil and gas and develop human capital "Manufacturing is our strategic choice to diversify the economy" Vision Key strategic goal "A globally competitive industry, based on "To increase the contribution of the innovation and acting as a major tool in manufacturing sector to the GDP transforming national resources into sustainable to 20% … " wealth" Source: KSA Natinal Industrialization Strategy document, Factiva

Reaching NIS strategic goal would position KSA in the league of Germany and Japan Manufacturing as percentage of GDP (2009)40 35%30 27% 25% 21% 21% 20% GDP contribution by 202020 17% 16% 13% 13% 13% 12% 12% 10% 10%10 5% 3% 2% 0 Thai- Singa- Korea Japan Ger- South Egypt United UK KSA France Turkey Greece Norway Algeria Hong Canada land pore many Africa States Kong1. Manufacturing defined as all activities under ISIC classification, Code DNote: Manufacturing value added (MVA) measures contribution of an entity to the whole manufacturing GDP of economy. MVA =Manufacturing GDP – taxes + subsidies on manufacturingSource: Nation master; BCG analysis

NIS strategic goal to be achieved byreaching four targets Four targets help reach strategic goal of 20% manufacturing contribution by 2020 Four targets are interrelated 1 1 GDP Increasing manufacturing GDP Grow Man. 3x threefold GDP 3 4 More export More value oriented add sectors 2 More jobs sectors Manufacturing Increasing share of Saudi labor Saudization in manufacturing to 30% -> 30% More Saudi Employment involve- More 3 Increasing share of ment "nice Saudi Share of tech "technology"/value add jobs" More jobs involveme man products manufacturing products for Saudis nt "intl -> 60% to 60% jobs" 2 Saudi 4 employment Share of exports Increasing share of exports in man revenues versus domestic -> 35% revenues to 35%Source: KSA National Industrialization Strategy document; BCG analysis

Eight improvement axes identified to achieveNIS targets NIS axes Description 1 • Improve macro-economic policies (i.e., monetary and fiscal policies, wages) Overall business • Stabilize micro-economic indicators (to attract local and foreign investments) environment • improve trade policies and market competition 2 • Stimulate industrial diversification and achieve balanced development Industrial complexes • Important factors behind industrial development • Stimulate innovation and development by sharing skills 3 • More attention should be devoted to SMEs (i.e., industrial SMEs support, industrial SMEs Business community incubation, business resources center, competitiveness development and industrial and SMEs modernization center, industrial financing mechanisms) 4 • Link R&D efforts with development processes (i.e., linking science and technology network Industrial innovation with innovation in industrial companies, linking educational output to labor market needs) and productivity • Promote innovation in small and medium scale industrial facilities 5 • Ensure the availability of technically and scientifically qualified and well-trained resources HR development • Train personnel to deal with, develop, and maintain modern machinery and equipments 6 Infrastructure and • Develop infrastructure in the traditional industrial regions and the new industrial cities/zones logistics support • Enhance provision of industrial services and supportive activities (i.e., handling, shipping, storage) 7 • Move the Kingdom towards higher technology-content industries New industry • Provide continuing support for the development of existing industries which have earned verticals successful comparative and competitive advantages (i.e., petrochemicals) 8 Governance mechanism • Manage the implementation of NISSource: NIS; BCG analltsis

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.  More than 300,000 Jobs.  More than 3,000 factories

MODON In Brief Increase Industrial Lands to 150 million m2 in 2015 160,000 140,000 120,000 Thousand m2 100,000 80,000 60,000 40,000 20,000 0

Investment Incentives Incentives Competitive Advantages SAR 1 / square meter Integrated Infrastructure / year Biggest Attractive Market in ME Electricity rates: $0.04 / KW Governmental Services Centers Custom exemption (for equipments & Housing & Commercial raw materials) Centers Least Rental Rates in Government GCC financing up to 75% Center of ME Industrial Cities widespread Modern Industrial Cities

Our Clients

Our Clients - International

Existing Industrial Cities 1. Riyadh 1 11. Assir 2. Riyadh 2 12. Al- Jouf 3. Jeddah 1 13. Tabuk 4. Jeddah 2 14. Hail 5. Dammam 1 15. Najran 6. Dammam 2 16. Jazan 7. Makkah 17. Rabigh 18. Al-Kharj 8. Madinah 19. Ar’ar 9. Qaseem 11. Al- Ahsa

Existing Industrial Cities

Cities Under Development 1. Riyadh 3 2. Jeddah 3 3. Dammam 3 4. Al-Zulfi 5. Qaseem 2 6. Al-Baha 1 7. Shaqra 8. Sudair 9. Hafer al batten

Cities Under Development

Cities Under Planning 1. Jeddah 4 2. Salwa 3. Al-Baha 2 4. Military Industries Complex (Al Kharj)

MODON Statistics Category # Existing 19 Under Development 9 Under Planning 4 Factories 3,000+ Labor 300,000+

MODON in Pictures

MODON Supply chain Projects – 3PL – Containers terminal – Dry Port – Rail freight

MODON’s Infrastructure ProjectsInternational Codes in Standard & Specification • Roads  ASTM  AASTHO • Utility  ACI  BS  ASA  ASCE

Infrastructure projects during the past 4 years

Infrastructure projects within 5 years of future

Infrastructure projects in the next 5 yearsStudy / Survey 80,000,000 $Development 1,330,000,000 $Rehabilitation 270,000,000 $Utilities & services Setup 1,400,000,000 $Total 3,080,000,000 $

Thank Youmodon.gov.sa www.modon.gov.sa 920000425

Business Forum: Industrial Infrastructure - Dr. Tawfiq Rabiah

by Patrick Ryan on Dec 23, 2011

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Business Forum: Industrial Infrastructure - Dr. Tawfiq Rabiah — Presentation Transcript