35 Industrial Cities, More than 3,500 Factories Are Leading Saudi Arabia’s Transformation into a Leading Industrial Power


35 Industrial Cities, More than 3,500 Factories Are Leading Saudi Arabia’s Transformation into a Leading Industrial Power

Riyadh, April 15, 2020, (SPA) (FANA) — The Saudi Authority for Industrial Cities and Technology Zones (MODON) has achieved qualitative accomplishments in a short period of time, represented in MODON’s making the most of the cooperation and complementarity relations with both public and private sectors to strengthen its strategy that aims to enable the industrial sector, contribute to the development of local industry, and to attract local and foreign investments that have the added-value to its industrial cities.

Established in 2001, today, MODON oversees 35 existing industrial cities. The Industrial Cities include 3,500 productive factories whereas around 500,000 workers are employed. Until now, the developed industrial lands in the industrial cities exceed 198,8 million square meters, geographically distributed and there are three sectors under which all the industrial cities in the Kingdom fall; these are cities of the Eastern Sector, cities of the Central Sector, and cities of the Western Sector, scattered to cover the regions of the Kingdom, with total investment amount exceeding 367 billion riyals. MODON also provides several advantages, products, services, and attracting incentives, to meet the requirements of attracting investments from GCC, Arab, and global markets to Saudi Arabia.

As a part of the Saudi Vision 2030, the Kingdom of Saudi Arabia has established the National Industrial Development and Logistics Vision Realization Program  (NIDLP) that aims to transform the Kingdom into a leading industrial power and an international logistics platform in a number of promising areas, focusing on the 4th Industrial Revolution, in a way that will generate ample employment opportunities for Saudi cadres, boost trade balance and maximize local content. The program focuses on four key sectors; industry, mining, energy and logistics. The program also designs and provides a range of essential enablers that include developing appropriate systems, providing the required financing, developing infrastructure, industrial lands and private areas, and enhancing research and innovation.

Within this framework, the Director General of MODON, Eng. Khalid bin Mohammed Al-Salem, said in a statement to the Saudi Press Agency (SPA) that the Saudi Vision 2030 has adopted industry as a strategic choice to diversify the Saudi economy, towards achieving sustainable development. He added that MODON has become one of the pillars of the Saudi Vision 2030, as an enabler of industry that oversees 35 industrial cities around the Kingdom and through assigned initiatives by NIDLP.

MODON has launched its new strategy aiming to enable the industrial sector, contribute to the development of local industry, strengthen local and global partnerships to attract local and foreign investments that have the added-value, and to transfer and localize industrial knowledge in the industrial cities. Eng. Al-Salem also stated that MODON approach is based on integration, cooperation, and building on what have been achieved to provide continuous development, at the level of internal work environment, relationships with local and foreign investors, government agencies, and with private and public sectors.

The Director General of MODON said: ” During the past period, we focused on expanding the scope of MODON from providing major infrastructures into playing an active role as enabler of industry, enhancing factories industrial competitiveness, promoting the ease of doing business via reducing the number of required industrial licenses and expanding their validity period, and reducing the time and requirement to obtain industrial licenses, in addition to cooperating with competent authorities to facilitate access to credit, and to provide advanced infrastructures and internet services in cooperation with the Ministry of Communications and Information Technology. MODON also launched a number of new products being provided to its industrial partners, and the number of products increased from only 4 in 2015 to 14 products by the end of 2019, and the industrial sector will witness the positive impact of these products on micro, small, and medium enterprises and will contribute to strengthening supply chain in Saudi Arabia.”

Eng. Al-Salem added that MODON has succeeded in promoting the growth of the privatization of industry, both in quality and quantity aspects in the industrial cities, supported by providing a number of incentives. Promoting the growth of privatization comes supported by some of MODON’s new products, launched in 2019, he added. MODON witnessed a growing demand for these products, despite the fact that some of them were trial products. Eng. Al-Salem also stated that privatization numbers has exceeded the expectations, and the product of ” ready-built factories” keeps attracting investors.

Saudi Arabia is witnessing a high growth in qualitative industries with high added-value. In 2019, the contracts for food manufacturing became five, while the industrial contracts for pharmaceuticals manufacturing witnessed increase of 70%, compared to the corresponding period of the previous year 2018. These industries represent a strategic importance to the Kingdom and its medication safety, along with its positive impact on increasing the exports of Saudi Arabia. 2019 also witnessed launching the operations of food and pharmaceutical factories in Saudi Arabia, Eng. Al-Salem added.

MODON was able to attract leading global companies of qualitative investments having the value-added, including General Electrics for manufacturing gas turbines, Isuzu Motors for producing trucks, Ebara Pumps Saudi Arabia LLC, Schlumberger for drilling rigs, and Henkel AG for chemical industry.

Dammam 2nd Industrial City hosts Siemens Co., Ltd. two industrial factories; the first factory covers 70,000 square meters and manufactures gas turbines, while the second factory is for producing automatic control panels and covers an area of 1,500 square meters. There are other investments have been attracted by MODON, it has signed a contract with Pharco Pharmaceuticals to build a pharmaceutical complex including research and development centers for Pharch, covering more than 62,000 square meters in Al-Madina Industrial City. SKAI Group, which is specialized in treating rocks and specific metals, is another investment attracted by MODON and will build its factory in Dammam 3rd Industrial City over 100,000 square meters space. MODON has also specified one of ready-built factories in Dammam 2nd Industrial City for Italian CEG specialized in Uninterruptible Power Supply (UPS).

MODON and the General Authority for Military Industries (GAMI) have signed an agreement, to attract qualitative local and foreign investments to transfer and localize qualitative technology in the industrial cities. According to the agreement, the two sides will guide licensed investors toward targeted fields in Saudi industrial cities affiliated with MODON, who will also provide incentives to investors, in addition to working on providing industrial constellations for the targeted military sectors along with options for investors to support the establishment and empowerment of the project and ensuring its expansion, sustainability and development. MODON attracted Science Technology Company to establish a complex for the military industries in Al-Kharj Industrial City, scattered to cover 27,000 square meters space. MODON has also specified industrial land in Riyadh 2nd Industrial City for INTRA Defense Technologies, being the first factory in Saudi Arabia to produce unmanned air vehicles. This agreement contributes to promoting investment in military industries and makes it an important pillar for economic development according to the objectives of the Saudi Vision 2030 which aims to localize 50% of military equipment spending by 2030.

Eng. Al-Salem affirmed that there are two factories under construction specialized in food sector covering a space estimated to be 34,000 square meters space, one in Sudair City for Industry and Businesses and the other in Jeddah 1st Industrial City, belonging to Alshaya International Group. MODON also signed cooperation agreement with the Chinese TEDA Investment Holding Co., Ltd to attract manufacturing industries with high added-value to Dammam 3rd Industrial City, where 1,000,000 square meters space has been specified for qualitative foreign investments.

At the level of logistics services and in line with MODON initiatives in NIDLP, MODON is developing smart logistics warehouse on an area of 249,000 square meters near to Jeddah 2nd Industrial City for Al-Nahdi Medical Company.

MODON and its partners both in public and private sectors work to provide a logistic environment, generally serving the Kingdom of Saudi Arabia, and particularly serving the industrial sector. MODON has attracted a huge number of logistic partners to its industrial and logistic cities, covering a total space of 2,500,000 square meters, distributed on logistic zones, trucks yard and yards for storage provided with integrated services, and many other services.

The Director General of MODON said that along with the increasing demand on logistic sector, the dedicated zones have been increased by 60% in 2019, compared to the corresponding period of the previous year, 2018. MODON also aims to increase its logistic services scope to be in line with the objectives of the Kingdom’s Vision 2030. It works on providing a number of dedicated zones, products, new services, in addition to integrating and interconnecting with importing, exporting, and transportation agencies in public and private sectors.

Some of the most prominent logistic companies that MODON signed with are Naqel in Arar and Al-Madinah and Starlinks in Jazan, Tabuk, and other zones; moreover, MODON’s logistic zone in Jeddah 1st Industrial City has been expanded to be a smart logistics zone having integrated services with LogiPoint Company, and covering 120,000 square meters space.

As for being in line with the Digital Transformation and the 4th Industrial Revolution, MODON in partnership with the Saudi Industrial Development Fund and King Abdulaziz City for Science and Technology ( KACST) launched the National Productivity Program to support factories in achieving the highest averages of production efficiency, and to enable the factories to adopt the technologies of the 4th Industrial Revolution. The first phase of the program that includes working with 20 factories has been launched in April 2019 in cooperation with General Electric, while the second phase will be launched in 2020 with 40 factories, enabling them to be leading and encouraging for other factories to shift toward the technologies of the 4th Industrial Revolution. As for introducing the program to factories, announcing its launch, and the standards for selecting the factories, three workshops were held in Riyadh, Jeddah, and Dammam, attended by more than 200 representatives of factories. MODON has selected 15 factories until now, and ten transformation plans have been handled to them.

The Director General of MODON affirmed that the Fiber Optic Internet coverage increased in the industrial cities by the end of 2019, and five industrial cities are connected to fiber optic cable to provide super high speeds. MODON also worked to provide and cover the industrial cities with 4G cellular network. MODON signed contracts in the fourth quarter of 2019 to establish around ten telecommunications towers, which will contribute to provision of required infrastructure to transfer to the 4th Industrial Revolution and its technologies.

MODON continues to work on developing and digitizing its services to improve the partners satisfaction. In this regard, the time in, acceptance of the applications time has been reduced to be in lesser than 15 days instead of 60 days, issuing permissions started to take 3 working days instead of 7, the duration of modifying  the “ partner contract “ is also reduced to be 10 working days instead of 20, issuing an operating license concerning safety measures is also reduced to be 7 working days instead of 20, in addition to reducing the required period of time of approving plans to be 5 working days rather than 15 working days.

Within its framework of supporting entrepreneurship and small and medium enterprises, MODON provided for these enterprises many products, services, and financing solutions in partnership with concerned authorities. MODON has succeeded to increase the ready-built factories to be more than 541 factories. In 2019, MODON also launched different products including ” Land and industrial loan” and ” Factory and industrial loan” that were launched in cooperation with Saudi Industrial Development Fund (SIDF), ” OSOS” a financing product launched in cooperation with the Social Development Bank, in addition to signing agreement with Manafa Capital to provide crowdfunding for entrepreneur and small and medium enterprises (SMEs) included in the industrial cities.

Eng. Al-Salem stated that MODON has signed many agreements to provide non-financing products and services; such as “Return to Work Basics” workshop which was delivered in 2019 in cooperation with Dulani Business Center, along with providing food trucks as a product and issuing affordable laws and regulations of ” food trucks” to support entrepreneurs and enable them to provide services in the industrial cities, where many of them benefited.

MODON also works in cooperation with different agencies to support the local content.  In cooperation with the Saudi Basic Industries Corporation (SABIC,) MODON launched “Nusaned” initiative which aims to provide incentives and support packages for industrial investors. In addition to that, MODON made an agreement with the Saudi Aramco’s Entrepreneurship Center “Waed” to support small and medium entrepreneurial businesses in MODON’s industrial cities and to stimulate industries with added-value.

The Saudi Authority for Industrial Cities and Technology Zones (MODON) has a high sense of social responsibility represented in committing to the objectives of the Saudi Vision 2030. MODON works to provide environmental protection and to encourage the best practices in the field of preserving the environment, such as recycling, fighting desertification, and the conservation of natural resources through providing balanced strategy between the requirements of the environmental protection and the conservation of natural resources, contributing to the achievement of sustainable development.

In this regard, MODON launched “Zero Waste” program to promote environmental sustainability and to reduce manufacturing wastes into zero waste. The awareness campaign “We Will not Tolerate… Our Environment Deserves” that was launched in the industrial cities stressed on the importance of using biodegradable plastics. MODON also signed cooperation agreement with Environment Friends Society in Dammam to raise the environmental awareness among the members of the industrial cities in the Eastern Region. The agreement also played a major role in localizing an important technology for the environmental protection, which is the technology of recycling wastes. MODON also signed tripartite partnership agreement with Charity Organization for Orphans in Riyadh Region “Ensan” and Recycling of Electronic and Electrical Equipment “Tadweeer” as part of “imprint” initiative which comes under the slogan “sponsor an orphan with your old devices”. According to the agreement, MODON recycles old electronic and electrical waste, then using the outputs of recycling by converting them into raw materials for other industries, and then directing their full value to support the activities of “Ensan” Organization.

In line with MODON’s role toward social responsibility and sports sector, MODON supports and encourages the healthy lifestyle in its industrial cities. In the same context, MODON annually organizes sports championship and in 2019, MODON organized the 2nd MODON’s championship. The competition witnessed the participation of 84 teams of companies and factories’ employees, which have contributed effectively to the improvement of working environment, production rates, in addition to raising sports practices in communities of the industrial cities. MODON’s championship also contributes positively to the achievement of Quality of Life Program, which is one of the programs of the Saudi Vision 2030.

Another achievement of MODON is establishing “MODON Lake”, which is the largest developed industrial lake in the Kingdom of Saudi Arabia. The lake is a renewable water treated in an environmentally friendly manner within Dammam 2nd Industrial City. The total area of the lake project is 400,000 square meters, and the lake itself spans 210,000 square meters which is 52% of the project. MODON also trialed ” MODON Tech” project in the information center of MODON Lake. The project aims to develop and establish awareness programs for male and female students to raise their awareness on industry and modern technologies of the 4th Industrial Revolution.

MODON intensified efforts to support and empower women in business sector, enabling them to contribute to the national economy through developing working environment conducive to women’s work in factories, in addition to providing childcare facilities in Dammam 1st Industrial City and Riyadh 2nd Industrial city. MODON also aims to expand services supporting women’s work and empowerment in the labor market of the industrial sector and until now, the total toll of Saudi women working in factories reached 17,000. In this regard, MODON signed a partnership agreement with Prince Sultan bin Abdul Aziz Fund for Women Development to set up a social-technological innovation center in Dammam 1st Industrial City, which includes incubators, business accelerators, and equipped technical laboratories with full equipment. MODON also signed with Saudi Women’s Innovation Foundation a memorandum of understanding (MoU) to work on the development of industry and industrialists in Jazan and enable small and medium enterprises to start their investments within industrial cities in the region.

In terms of holding awareness forums and activities, MODON holds general and specialized workshops and forums in its industrial cities. In partnership with the Saudi Export Development Authority, General Authority of Zakat and Tax, and the Saudi Industrial Development Fund (SIDF), MODON held many workshops and forums targeting its industrial partners. In addition to that, MODON held awareness workshops covering the environmental aspect, health and safety, and laws of hazardous factories.