الـتـقـريــر الـسـنــــوي ANNUAL REPORT 2019 ـAH 1441 - 1440

modon.gov.sa In the Name of Allah, the Most Gracious, the Most Merciful 4 Annual Report 2019 5

Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al-Saud May Allah protect him

“My first objective is for our country to be a pioneer and successful global model of excellence on all fronts, and I will work with you to achieve that.” 6 Annual Report 2019 7

His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al-Saud Crown Prince, Deputy Prime Minister and Minister of Defense of Saudi Arabia May Allah protect him

“Our ambition is to build a thriving country where all citizens can fulfilll their dreams, hopes and ambitions. Therefore, we will not rest until our nation is a leader on the global stage.” Contents Chapter Three 68 Corporate Performance

70 Operational Excellence 86 Human Capital 90 Digital Transformation 92 Communication and Empowerment 96 Social Responsibility 102 Financial Performance 10 Introduction 106 Internal Audit

12 Board of Directors 14 Chairman’s Foreword 16 Director-General’s Statement 18 Organizational Structure Chapter One 20 Modon’s Journey Chapter Four 24 Modon in Numbers 40 Modon’s Strategy 28 Executive Summary 42 Strategy Development and Implementation 110 Industrial Cities, 45 Saudi Vision 2030 Initiatives Services and Products 50 Corporate Excellence 51 Quality Management 112 Modon’s Services 114 Modon’s Products 116 Industrial Cities 222 Private Industrial Cities and Complexes: Building Today for a Bright Tomorrow 231 Technology Zones

Chapter Two 54 Industry Enablement Chapter Five 56 Partnerships and Business 59 Attracting Investment 236 Conclusion 60 National Productivity Program 61 Comprehensive Observer Program 238 Challenges and Solutions 62 Business Incubators 241 Thanks and Appreciation 63 Conducive Environment and Business Value 64 How Modon Supports Industrial Productivity 10 Annual Report 2019 11

Introduction

This annual report is As the Saudi Authority for Industrial Cities and Technology the facilitation of a modern investment environment that prepared in line with the Zones (Modon) successfully completes another year of adheres to international standards. We work in line with highest transparency business, we continue to establish ourselves as a leading the directives of the government, led by Custodian of the standards and outlines organization in the Kingdom. This has been another Two Holy Mosques King Salman bin Abdulaziz Al-Saud and the authority’s work remarkable year in terms of achievement and we enter a Crown Prince Mohammed bin Salman bin Abdulaziz Al-Saud, and achievements over new year with renewed hope and ambition, guided by a so we can play our part in ensuring Saudi Arabia is a success 2019, as mandated by forward-thinking government and its far-reaching blueprint story on the global stage. Article (29) of the Council for the future – Saudi Vision 2030. We also maintain our This year’s report comprehensively outlines our of Ministers’ law issued longstanding commitment to achieving a leading global achievements, starting with a successful restructuring of through Royal Decree position and high level of competitiveness. the authority. It also covers Modon’s efforts in improving number (A/13), dated 2019 has been a year where we demonstrated innovation, employee performance as we continue to expand our August 20, 1993. creativity and excellence. It is a year where we consolidated portfolio of services provided to the industrial and our position as a sector leader by developing local investment sectors, initiatives to develop human capital, and industry and focused on nationalizing regional and global programs to implement the Kingdom’s Saudization policies investments by leveraging the capabilities and long-standing and actively increase the number of women who work with expertise we have cultivated since the 1970s – a decade us. when the government initially announced the launch of The report will explore the improvements we have made in three industrial cities as a foundation to foster urban and our technical, legal and regulatory performance as well as industrial development in our proud country. Fast forward to the development of services in the industrial cities under our 2020, and we have played a pivotal role in setting up no less purview through the highest level of operational assessment than 35 industrial cities that provide comprehensive services methods. It will also shed light on achievements in the to investors. services we provided, in-progress and completed projects, 2019 has been a year in which we continued to supported corporate performance and business development.

Riyadh Second Industrial City 12 Annual Report 2019 13

Board of Directors – Saudi Authority for Industrial Cities and Technology Zones (MODON)

HE Mr. HE Eng. Eng. Eng. Mr. Mr. Mr. Dr. Bandar I. Al-Khorayef Osama A. Al-Zamil Khalid M. Al-Salem Ahmed A. Al-Saleem Bader K. Al-Mahri Abdul Salam A. Al-Mana Abdullah I. Al-Ghumlas Yousef M. Al-Youssef

Chairman Representative of the Ministry of Representative of the Ministry of Representative of the Ministry of Representative of the Ministry of Representative of King Abdulaziz Minister of Industry and Modon Director-General Representative of the Ministry of Industry and Mineral Resources Municipal and Rural Affairs Economy and Planning Commerce and Investment City for Science and Technology Mineral Resources Finance (KACST)

Board Member Board Member Board Member Board Member Board Member Board Member Board Member

Eng. Khaled S. Al-Hammad

Board Secretary

Dr. Eng. Eng. Eng. Eng. Eng. Ahmed H. Al-Thenayan Mohammed A. Al-Mowkley Khaled S. Al-Ohali Mohammed O. Al-Juaid Ziad T. Al-Murshed Khalid H. Al-Qanoon

Representative of the Ministry of Private Sector Representative Private Sector Representative Private Sector Representative Private Sector Representative Private Sector Representative Communications and Information Technology

Board Member Board Member Board Member Board Member Board Member Board Member 14 Annual Report 2019 15

Chairman’s Foreword

It was clear by the end of 2019 that the government’s Every day the global industrial sector witnesses economy and working to develop initiatives and solutions efforts to implement Saudi Vision 2030 was continuing to continuous change as manufacturers upgrade productive that will advance Saudi industry. In turn, this will elevate bear fruit, especially when we consider the huge strides efficiency through the adoption of advanced technologies the national economy so that it is on par with those of the country has made across all sectors. Saudi Arabia is such as the Internet of Things (IoT), robotics, Augmented developed countries, thus achieving the aspirations of our currently the largest economy in the Middle East and Reality (AR), Virtual Reality (VR), 3D printing and Artificial proud country. North Africa, member of the Group of Twenty (G20) Intelligence (AI). These innovations also collectively largest economies in the world, and has been ranked top contribute to the so-called Fourth Industrial Revolution globally for implementing business environment reforms. and Smart Manufacturing (Industry 4.0) paradigm We should rightly be proud of all our achievements under shifts that we are currently experiencing. The sector is the leadership of Custodian of the Two Holy Mosques King increasingly investing in digital technology that enables Salman bin Abdulaziz Al-Saud. This is especially the case factory self-management, enhances decision-making when you consider the extensive economic reform that capabilities and increases manufacturing revenue. has taken place in the Kingdom, the largest of its kind in Economically, these upgrades have helped the global the country’s recent history. sector grow by $4.5 trillion. Saudi Vision 2030 has the overarching objective of We are ready to play an active part in this revolution and achieving sustainable development for all citizens by embed digital transformation and smart manufacturing diversifying the economy. Manufacturing is very much initiatives across our business so we can achieve a central pillar of this vision – HRH Prince Mohammed significant advancements in our production. These bin Salman bin Abdulaziz Al-Saud, Crown Prince, Deputy improvements will be based on facilitating integration Prime Minister and Minister of Defense, launched the between vision development and decision making as well National Industrial Development and Logistics Program as across our entire chain of operations including design, (NIDLP) that focuses on developing four key sectors supply chain management, production, delivery and consisting of industry, mining, energy and logistics. customer service. NIDLP’s aim is to transform Saudi Arabia into a leading At the Ministry of Industry and Mineral Resources, we are industrial power and international logistics hub. witnessing an acceleration of change across the global

Minister of Industry and Mineral Resources HE Mr. Bandar I. Al-Khorayef 16 Annual Report 2019 17

Director-General’s Statement

Since our establishment in 2001, Modon has focused Modon’s strategy for enabling local industry and increasing and project financing in one package, while the latter aims on developing industrial zones and their integrated domestic industrial production is centered around developing to reduce the time it takes partner investors to complete and infrastructure. Today we oversee 35 cities and many others new services and products in line with an innovative vision follow up applications by integrating the procedures and under development across the Kingdom, in addition to that aims to meet the needs of private sector partners criteria of Modon and SIDF. private industrial zones. We have helped increase the total and ensure their active participation in national economic We aimed to improve financing options for entrepreneurs by area of developed industrial land in the Kingdom to more diversification. To achieve this, we have worked on initiatives setting up two key products. Firstly, we worked with Banque than 198.8 million m2, while the country’s industrial cities for the National Industrial Development and Logistics Saudi Fransi to launch a co-financing product with a ceiling host around 3,600 factories and are fulfillling 6,301 industrial, Program (NIDLP) and provided tailor-made products of up to SAR1 billion ($266.4 million); it will provide various service and logistical contracts. More than 500,000 workers across the country such as industrial land with developed incentive packages and promote support services such as work in these purpose-built metropolises, including around infrastructure and services, land designated for investment logistics to increase the contribution of small and medium 16,825 Saudi women and 184,000 Saudi men. in facilities and services development, purpose-built factories enterprises to the gross domestic product (GDP). Secondly, Modon operates according to a clearly defined strategy with up to 1,500 m2 in area, and holistic logistical solutions. with the Social Development Bank (SDB) we launched specific objectives to ensure our public–private partnerships We have also launched the National Productivity Program Osos, which facilitates access to purpose-built factories (PPP) are operating optimally. We have ensured industrial as an initiative under the NIDLP umbrella. It aims to help and financing for entrepreneurs and aims to improve Saudi cities are fully-featured and incentivized, resulting in factories achieve the highest levels of productive efficiency Arabia’s ranking on entrepreneurship indexes. them attracting global industrial companies and foreign through the development of advanced transformation Modon works in line with the highest quality and corporate investments that add value to the Saudi industry sector. We plans centered around achieving operational excellence excellence standards in order to achieve its strategy, which in have not ignored the value of local partnerships; over SAR367 and adopting highly-advanced smart technologies. Modon turn aims to develop exemplary industrial cities committed to billion ($97.7 billion) have been invested in our domestic started implementing this initiative by earmarking 100 employing innovative technologies that meet partners’ needs ventures. factories as models of excellence that could be followed and support the growth of small and medium enterprises As the world continues to undergo significant industrial by manufacturers and partnered with the Saudi Industrial and entrepreneurs. This annual report will illustrate in detail transformations, Modon has worked extensively to encourage Development Fund (SIDF) and King Abdulaziz City for Science our achievements over the past year and future strategies to the participation of Saudi-based small and medium and Technology (KACST). ensure our businesses continue to thrive and flourish. enterprises, entrepreneurs and large companies in local Modon also built two key products in cooperation with SIDF industry development. The aim is to help realize Saudi Vision to help streamline investment in industrial development 2030’s goal of promoting national manufacturing industries, – the Land and Industrial Loan, and Factory and Loan. The contributing to economic diversification in the process. former enables interested parties to apply for industrial land

Modon Director-General Eng. Khalid M. Al-Salem 18 Annual Report 2019 19

Director - General Organizational Structure Deputy

Director - General’s Office Internal Audit General Management

Marketing and Corporate Management Legal Affairs Communications Department

Partner Empowerment Public Relations Unit

Marketing

Deputy Director - General of Deputy Director - General for Deputy Director - General of Deputy Director - General of Deputy Director - General of Deputy Director - General of Organizational Performance and Finance Organizational Transformation Institutional Services Business Development Operation of Industrial Cities Projects

Information and General Accounts Strategy and Initiatives Investment Development Central Sector Project Execution Communications Technology

Financial Planning and Quality and Institutional Information Logistical Services Western Sector Research and Design Financial Reporting Excellence Technology Security Development

Studies and Institutional Networks and Industry and Private Treasury Operations Eastern Sector Project Control Innovation Infrastructure Cities Development

Task Management and Smart Systems and Technical Areas and Urban Planning and Geographic Facilities Follow-Up Office Applications Development Industrial Productivity Information System (GIS)

Facility Safety and Vision Realization Office Business Analysis Basic Services Provision Contract Follow-Up

Industrial City Security Human Resources and Safety

Human Resources Health and Operations Environment

Talent Development

Support Services 20 Annual Report 2019 21

Modon’s Journey

Since the 1970s, Modon has always been committed to creating for development and investment whose pillars are advanced • Development of land designated for industrial use with Today, we conclude 2019 with a clear new vision that aims to integrated industrial environments that contribute towards the industrial cities, comprehensive infrastructure, high-quality fully-integrated services. optimize our business by increasing operational quality and development of a domestic knowledge economy. We support service facilities and a world-class logistical network. • Creation of an optimal environment to facilitate the efficiency. We aim to achieve this through a strategy where the Kingdom’s efforts to nationalize local and international For more than three decades, Modon has worked in line with development and establishment of technology zones we are working side-by-side with the National Industrial investments as part of an optimal strategy that aims to diversify a vision that advocates expansion in the industrial sector and across the Kingdom. Development and Logistics Program (NIDLP) and implementing sources of domestic income and works towards the realization nationalization of the technology industry. The Saudi Authority • Promotion of various mechanisms to attract industrial initiatives to enable the domestic manufacturing sector to of development objectives in line with Saudi Vision 2030. Modon for Industrial Cities and Technology Zones (Modon) was formally investment. flourish and effectively contribute to the national economy. intends to be an integral part of the transition into a post-oil established in 2001 through Ministerial Resolution no. 235 • Provision of integrated infrastructure and services to help The authority also wants to provide a more extensive range economy by contributing to an open and competitive business dated 27/08/1422 AH, with a mandate to work as a developer of attract investments. of services and products to our investor and manufacturing environment and promoting Saudi Arabia as a prime destination industrial cities. Our responsibilities include the following: • Maximized utilization of regional and international partners, delivering in the process innovative solutions and agreements signed over the years. operations that are more creative and streamlined.

Administrative structure Department’s name Number of industrial approved for the changed to General Three industrial cities are cities under the Modon introduces strategy founded in Riyadh, Jeddah that aims to contribute to Industry Affairs and Directorate for Ministry of Industry Area of developed Total road length in Capacity of Electricity Affairs Industrial and and Dammam, covering a and Electricity’s and meet the needs of total area of 1.4 million m2 land covers 40.5 the industrial cities power stations national industrial departments of the Electrical Affairs supervision increases million m2 reach 247 km reaches 6.432 MVA Ministry of Commerce to 12 development 191 19 19 199 200 201 201 201

19 19 19 2001 200 2010 201 201 2019 Both departments Ministry’s focus Number of The Saudi Authority Number of Number of Number of Number of Modons focus are integrated into divided into two industrial cities in for Industrial Cities industrial cities industrial cities industrial cities industrial cities switches to the Industrial and main sectors – the Kingdom and Technology increases to 14 increases to 21 and increases to 32, increases to 35, attracting further Electrical Affairs commerce and increases to nine Zones (Modon) is area of developed covering a total area covering total area investment, while Department on Nov industry established land covers 123 of 163 million m2 of 191 million m2 the National 28, 1962 million m2 Productivity Program is launched 22 Annual Report 2019 23

“I ask everyone not to believe me but to look at the numbers; for the numbers speak for themselves”

His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al-Saud Crown Prince, Deputy Prime Minister and Minister of Defense May Allah protect him 24 Annual Report 2019 25

Modon in Numbers 35 3,600 6,301 1,264 541 industrial cities factories industrial and investment contracts service facilities purpose-built factories

1٫990 517,242 industrial city employees issued operational licenses

184,000 7,400 MVA total male Saudi industrial city power station capacity employees

16,825 123,500 female Saudi industrial city cubic meters per day employees wastewater treatment plant capacity 26 Annual Report 2019 27

m² 125٫322٫669 m² 9,647 47,344 198,858,030 of developed land allocated areas residential units residential capacity for industrial city employees

million m² 186٫755 m² 175,924 m² 1٫775 63٫600 trees planted in industrial cities of green space in industrial cities of sports, training and theater of training center space in space industrial cities 28 Annual Report 2019 29

Executive Summary 30 Annual Report 2019 31

Executive Summary

Modon’s achievements over 2019 were significant and is focused on improving customers’ investment helped contribute to the development of a knowledge experience in line with a clear vision that employs You can view the economy. Our successes also led to the nationalization of modern technology as a means to building creative and local and global investments as a viable strategic option high-quality solutions. The result was a well-structured to achieve development objectives, create a competitive strategy developed by local talents and inspired by Saudi Executive Summary environment and promote the Kingdom as an attractive Vision 2030, which seeks to establish a thriving economy investment destination. and prosperous future. with AR technology As we look towards a future full of ambition, Modon

Available on Google Play Point the camera at the Download Artivive 1 2 or the Apple Store 3 Modon logo

Riyadh Second Industrial City 32 Annual Report 2019 33

Executive Summary Development of Business Partnerships Corporate Excellence

In 2019, Modon worked towards achieving the highest regionally and globally. We constantly sought to improve level of quality and corporate excellence, ensuring that we our operations, notably through the following initiatives: continue to have the edge over our competitors locally,

A cooperation agreement was signed between Modon and the General Authority for Military Industries (GAMI) with the aim of boosting investment in military industries.

Issuance of a guide that covers 59 key Automation of 90 percent of services Introduction of the Industrial Cities services on the Modon website. with the aim of contributing to a smart Quality Management System in line with industrial environment that boosts the the ISO 9001:2015 global quality standard. domestic economy.

Partnerships and Business An MoU was signed with the Ministry of Housing’s Building Technology Stimulus Program to support projects that met the program’s criteria.

In 2019 Modon focused on improving investor experience One way we facilitated this was by signing and imple- and developed its operational procedures as part of its ob- menting many partnerships, agreements and memoranda jective to create a fully-integrated economic environment. of understanding:

Attracting General Industry

Modon joined NIDLP’s logistics committee to promote logistical services. Two factories owned by the Alshaya Group were set up in Sudair The Science Technology Company will build a military industries City for Industry and Business and Jeddah First Industrial City, complex in Al-Kharj Industrial City. promoting investment in the food industry.

Italian electronics company CEG started producing uninterruptible Pharco Pharmaceuticals established an integrated pharmaceutical power supply (UPS) units in Dammam Second Industrial City. complex in Madinah.

Two agreements were signed with the Social Development Bank and Saudi Electricity Company (SEC). 34 Annual Report 2019 35

Executive Summary

Encouragement of Private Sector Investment Comprehensive Observer Program

The Comprehensive Observer Program aims to streamline was reviewed over 3,756 visits and revealed an increase in our processes related to inspection visits and increase the their overall numbers. There are currently 517,242 em- A cooperation agreement was signed with An MoU was signed with SABIC to support local efficiency and quality of routine visits to industrial facil- ployees including 16,825 Saudi women and 184,000 Saudi Banque Saudi Fransi to support small and medium production via the Nusaned program. ities. Data of employees working in the industrial cities men. enterprises.

An agreement was reached with the Aramco Asharqia Chamber agreed to work with us to Entrepreneurship Center (Wa’ed) to support local Business Development support and empower women entrepreneurs. entrepreneurs. Number of Number of contracts Attracting General Investment contracts in operation 2018 6,190 3,474 2019 6,254 3,600

An MoU was signed with Chinese An agreement was reached with TEDA An MoU was signed with Euro Pharma company Sky Group to build a stone Holding Company. to establish a pharmaceutical factory in processing factory in Dammam Second Sudair Industrial City Industrial City.

National Productivity Program

As part of their involvement in the National Productivity The first phase of the program, which carries the aim of Program, Modon and SIDF signed a cooperation agree- improving operational productivity by 90 percent, com- ment with King Abdulaziz City for Science and Technology menced in April 2019 for 20 factories in cooperation with (KACST). Under this deal, Modon will identify 100 factories General Electric. The second phase will start in 2020 for a using criteria approved by the three stakeholders, assess further 40 factories. them and create development plans. 36 Annual Report 2019 37

Operational Excellence Empowerment of National Talents 2018 2019

• Increased number of Saudi women employees at industrial cities to 16,825. Business growth • Increased number of Saudi men and women employees at Modon headquarters to 396, out of a total 398 employees. No. of approved plans 1٫372 1,168

No. of approved construction licenses 953 845 398 396 2 383 15 34 No. of approved business licenses 5٫619 1,848 Total employees Saudi Non-Saudi Men Women Average age

Operational licenses Awards and Certificates No. of operational licenses 1٫200 1,990 As testament to its sound approach in meeting national Received contractor requests transformation objectives, Modon received many awards and certificates over 2019. Key highlights include:

No. of contractor qualification requests received 173 116

No. of qualified contractors 24 46

Received requests from engineering consultancy offices and qualified engineering consultancy offices

No. of received requests from engineering consultancy offices 238 527

No. of qualified consultancy offices 78 150 Excellence in GIS Implementation Customer Service Excellence Award Corporate Excellence Award for Innovation Award (EGI) for innovation and scientific for successful implementation of the in Using Technology following completion Field inspection visits excellence. electronic branch project. of the digital interactive Modon platform project. No. of inspection visits 8٫471 8٫694 38 Annual Report 2019 39

“Modon is a key pillar in the industrial system and works in a holistic manner to make manufacturing a prime choice for local and international investors.”

HE Mr. Bandar I. Al-Khorayef Minister of Industry and Mineral Resources

Sudair City for Industry and Businesses 40 Annual Report 2019 41

Modon approved in 2019 a new organizational Chapter One structure across its businesses to ensure continuous quality in the provision of services and products and stay abreast of domestic 40 Modon’s Strategy and international developments. This is in line with a vision that targets the cultivation of an 42 Strategy Development and Implementation optimal environment to foster industries and 45 Saudi Vision 2030 Initiatives upgrade industrial cities across the Kingdom. 50 Corporate Excellence This chapter will focus extensively on 51 Quality Management Modon’s strategy as well as initiatives launched in cooperation with the National Industrial Development and Logistics Program (NIDLP) that aim to contribute towards the achievement of Saudi Vision 2030. 42 Annual Report 2019 43

Strategy Development and Implementation Strategic Themes

Building and promoting Smart industrial cities Modon’s partners Enablers partnerships and technology zones We are constantly Modon is dedicated to meeting Saudi Vision 2030’s goals As Modon is a main authority responsible for implementing committed to achieving through a strategic vision that aims to fulfilll a particular the NIDLP, we have worked to integrate the program’s initia- Achievement of integration Preparation of industrial Because our customers are Modon’s strategy will be Saudi Vision 2030, focus of this national blueprint – a Thriving Economy. We tives within our strategy that focus on the following: between the public and zones that act as an attractive considered partners in Modon’s achieved by increasing the transforming Saudi intend to achieve this by integrating NIDLP’s Delivery Plan • Completing essential services in the industrial cities private sectors to effectively investment environment through success, we are consistently efficiency, productivity and Arabia into a leading 2018 - 2025 into our operations and working in line with the • Boosting industrial productivity and related logistical enable industry, contributing the development of exemplary committed to achieving high quality of our workforce and industrial power National Industrial Strategy to meet two key objectives: services to sustainable industrial cities with integrated services levels of customer satisfaction operations. and global logistical • Establishing food industrial complexes development, efficiently that exceed modern industrial and improving end-user platform. Modon seeks to build non-oil revenues and create new em- facilitating business in industrial requirements and meet the experience. • Promotion of a motivational Promote industrial development in Saudi Arabia ployment opportunities, in addition to effectively partnering cities and removing unnecessary highest safety, security, health working environment with the private sector and ensuring a safe environment for constraints that may slow down and environmental standards. • Improving partner • Increased efficiency and investors. operations. satisfaction quality levels Contribute to the Saudi economy • Promotion of a distinctive • Provision of exceptional • Achievement of financial • Integration with relevant industrial environment industrial and logistical sustainability government and other official • Development of high- services and products Modon’s Strategy authorities quality industrial cities and • Partnerships with the private technology zones sector to support industrial development

Modon’s Strategic Roadmap Vision Mission Values

Cultivation of an intelligent industrial and Sustainable development and Initiative technological environment that effectively management of industrial cities and Commitment enables industry and contributes to the technology zones that contribute towards Enablement national economy’s development an optimal economic environment. Provision

Strategic Objectives

Promotion of industrial development Contribution to the national economy 2001 2018 2024 2030 Foundation and Service completion and Industry Modon 2030 preparation implementation of Industry enablement 4.0 initiatives 44 Annual Report 2019 45

Strategy Planning and Execution Saudi Vision 2030 Initiatives

Modon worked towards achieving the highest level the management of strategic planning operations, Modon seeks to contribute to the cultivation of an substantial progress in many of our initiatives designed in of excellence and corporate performance so we could performance evaluation and appraisal, and how attractive investment environment and support the goals cooperation with the NIDLP. These projects had a positive meet our strategic objectives. We established separate to optimally realize our strategy. Modon’s strategy of the private sector; this is one of the objectives outlined impact on driving our business, programs and strategic offices for our strategy, projects and vision realization management office aims to consistently follow best by Saudi Vision 2030 to help facilitate sustainable vision – all key growth indicators. In turn, their success departments. Close attention was also given to practice in planning and implementation. development. Over the course of 2019, we oversaw helped us contribute effectively to the national economy.

Modon/NIDLP initiatives Vision Realization Office

Modon established its Vision Realization Office with a plementation of best practice with regards to strategy mandate to help the authority contribute to achieving planning and execution and ensuring that we achieve the Development of Taif Industrial City Infrastructure rehabilitation for Riyadh Second Industrial City Saudi Vision 2030 and meet the goals of its main themes. right results. Over 2019, the unit oversaw many achieve- The unit’s responsibilities include monitoring the im- ments including: Completion rate 17% Completion rate 20 %

Financing of 17 initiatives after a thorough review of Key highlights Key highlights expenditure efficiency • Design contract awarded to develop Taif Industrial City • Phase two of the design contract to complete and update Riyadh Second • Design for city’s infrastructure networks completed Industrial City’s infrastructure (west residential area) awarded Transfer of the Industrial Development Enterprise • Contract to execute city’s infrastructure networks awarded • Phase two of the design contract to complete and update Riyadh Second initiative from the Ministry of Industry and Mineral Industrial City’s infrastructure (west residential area) completed Resources to Modon

Identification of six Modon initiatives as imperative in the context of achieving the NIDLP’s objectives Construction and preparation of service buildings in industrial cities Updating and development of security systems in the main industrial cities Evaluation of the authority’s current digital maturity across 100 factories; transformation plans were developed Completion rate 5 % Completion rate 3 % for many of these factories so that they incorporated the key features of Industry 4.0 Key highlights Key highlights

Improvement in meeting performance indicators, with 23 • Design work for service buildings initialized • Contract in industrial cities awarded out of 30 initiatives proceeding as planned • Phase one of the design contract for service buildings in several • Phase one of the contract to design control rooms and industrial cities completed surveillance systems completed 46 Annual Report 2019 47

Infrastructure completion and update at Dammam Second Industrial City Infrastructure completion at Durma Industrial City Provision of water source and construction of wastewater plant at Infrastructure completion at Al-Kharj Industrial City Jazan Industrial City

Completion rate 6 % Completion rate 20 % Completion rate 16 % Completion rate 22 %

Key highlights Key highlights Key highlights Key highlights

• Designs completed for infrastructure rehabilitation, including • Review and update of infrastructure designs for Durma Indus- • Designs of city’s potable water network reviewed and updated • Agreement with Saudi Electricity Company to construct two fire, irrigation, storm and roads networks and afforestation trial City completed • Infrastructure designs of city reviewed and updated power stations signed • Project to implement infrastructure for Durma Industrial City • Project to complete infrastructure in Al-Kharj Industrial City offered for tender awarded

Infrastructure completion at Qassim Second Industrial City Construction and preparation of Civil Defense stations in industrial Infrastructure completion at Al-Madinah Industrial City Development of two logistics cities cities

Completion rate 26 % Completion rate 11 % Completion rate 29 % Completion rate 21 %

Key highlights Key highlights Key highlights Key highlights

• Internal power distribution network completed • Design contract for fire stations awarded • Phase one of designs for infrastructure in Al-Madinah Industrial • Initial design for logistics city at Al-Qurayyat completed • Contract to execute city’s infrastructure networks awarded • Phase one of fire station design contract completed City completed • Initial design for logistics city at Ar’ar completed • Designs for rainwater drainage channels to mitigate flood risks completed

Execution of infrastructure work at Hail Industrial City expansion; construction Infrastructure and rainwater drainage system completion at Jeddah Infrastructure completion at Qassim First Industrial City Development of Ras Abu Gamys zone of wastewater plant, purification station and provision of water source Second and Third Industrial Cities

Completion rate 15 % Completion rate 13 % Completion rate 3% Completion rate 17 %

Key highlights Key highlights Key highlights

• Infrastructure designs of city reviewed and updated • Design contract for services and facilities (water, wastewater and irrigation) Awaiting NIDLP approval • Feasibility study on development of Ras Abu Gamys city com- • Contract for infrastructure completion offered for tender connection between Jeddah Second and Third Industrial Cities awarded pleted • Design contract for services and facilities (water, wastewater and irrigation) • Market assessment completed connection between Jeddah Second and Third Industrial Cities completed 48 Annual Report 2019 49

Modon Oases initiative Infrastructure completion at Riyadh Third Industrial City Development of industrial city in Hotat Bani Tamim National Productivity Program

Completion rate 24% Completion rate 0% Completion rate 11 % Completion rate 17 %

Key highlights Key highlights

• Execution of roads network and infrastructure at Yanbu Oasis completed Yet to commence • Factory selection standards established • Design for water tanks, pumping station and control rooms at Qassim • Transformation plan for factories developed Oasis completed • Design for wastewater treatment plant at Jeddah Oasis completed

Development of industrial city in Duba Industrial development enterprise

Phase two completion of infrastructure and logistics zone at Sudair Products to support entrepreneurs and small and medium enterprises City Completion rate 11 % Completion rate 15 %

Completion rate 13 % Completion rate 37 % Key highlights

• Enterprise’s scope of work approved Key highlights Key highlights • Definition and update of enterprise’s objectives completed • Sudair City for Industry and Businesses’ infrastructure designs • Designs for 28 factories at Riyadh Third Industrial City completed reviewed and updated • 20 factories at Al-Kharj completed • Contract for infrastructure completion at Sudair City for Indus- • Designs for 32 factories at Jeddah Oasis completed try and Businesses offered for tender • Designs for small factories at Al-Ahsa completed Wa’ad Al-Shamal Industrial City development Construction and preparation of mosques in cities

Completion rate 0 % Completion rate 0 % Infrastructure rehabilitation and completion at Jeddah First Industrial Infrastructure work and rainwater drainage completion at Dammam City Third Industrial City Yet to commence Yet to commence

Completion rate 10% Completion rate 15 %

Food industrial cities and complexes Key highlights Key highlights

• Design contract for infrastructure rehabilitation and completion • Agreement with the Saudi Electricity Company to implement at Jeddah First Industrial City awarded power station signed Completion rate 0 % • Design contract for infrastructure rehabilitation and completion • Infrastructure designs for Zone D reviewed and updated at Jeddah First Industrial City finished Yet to commence 50 Annual Report 2019 51

Corporate Excellence Quality Management

Modon is committed to In each city, we want to use innovative technologies, meet our service guide that outlines 59 key services. We also automated 90 In line with policies that target the highest standards of quality practices and procedures to regularly and effectively meet our achieving the highest partners’ needs, ensure satisfaction through application of percent of services with the aim of developing a smart industrial and consistently improve efficiency and effectiveness, Modon partners’ needs, improve satisfaction levels and meet regulatory quality and corporate appropriate performance indicators and support the growth of environment that boosts the local economy, is sensitive to launched a Quality Management System in our industrial requirements in line with the ISO 9001:2015 global standard. standards in order to small and medium enterprises. partner manufacturers’ needs and requirements, and realizes the cities. It comprises a set of approved policies, operational best realize a strategy that To ensure excellence across the business and stay ahead of our aspirations and will of our wise government as outlined in Saudi aims to develop exem- competitors domestically, regionally and global by constantly Vision 2030. plary industrial cities. improving our operations, Modon issued and published online a Quality Management System Objectives

Ensure Modon has the ability to continue Ensure compliance with and application meeting partner requirements of the quality policy

Continually enhance and develop the Foster and promote a culture of quality efficiency of procedures and policies

Quality Audit Procedure:

Plan and schedule the audit process

Conduct an audit assessment

Prepare audit results and identify opportunities for improvement and/or discrepancies

Produce a final audit report that identifies challenges and addresses them under the principle of continuous improvement

Monitor corrective measures

Jeddah First Industrial city Present final results 52 Annual Report 2019 53

“In Modon, we invest in the enablement of industry to create a prosperous future and thriving economy for generations to come”

Eng. Khalid M. Al-Salem Modon Director General 54 Annual Report 2019 55

One of Saudi Arabia’s key development objec- Chapter Two tives is to effectively enable domestic industry. The country aims to achieve this by optimally utilizing local talents and logistical capacities 54 Industry Enablement and providing attractive domestic and interna- tional investment opportunities, thus promot- 56 Partnerships and Business ing regional and global competitiveness. 59 Attracting Investment This chapter will outline our efforts to effective- 60 National Productivity Program ly enable industry over 2019. Our assigned role 61 Comprehensive Observer in fostering an attractive investment climate Program and establishing effective partnerships in order 62 Business Incubators to achieve our industrial development objec- 63 Conducive Environment and tives will also be discussed. Business Value 64 How Modon Supports Industrial Productivity 56 Annual Report 2019 57

Partnerships and Business Development of Business Partnerships

Our achievements in 2019 fueled our ambition to stakeholders demand. To achieve this end, we signed accomplish more in 2020. and implemented key partnerships, agreements and Modon worked hard over the past year to improve investor memoranda of understanding (MoU) to help improve experience and contribute to the development of a fully- opportunities to attract fresh investment and contribute integrated economic environment that our partners and towards achievement of Saudi Vision 2030’s objectives.

Attracting General Industry Modon signed a cooperation agreement with the General Authority for Military Industries (GAMI) to boost investment in military industries. The aim of the partnership will be to support Saudi Vision 2030 objective of ensuring half of the military expenditure is focused on domestic industries. The agreement will also provide multiple products for investors and lead to the creation of military industrial complexes. • The Alshaya Group agreed to set up two factories at Sudair City • Pharco Pharmaceuticals agreed to establish an integrated phar- for Industry and Businesses and Jeddah First Industrial City maceuticals complex in Madinah

Total investment value of SAR200 million ($53.33 Total investment value of over SAR500 million million) ($133.33 million)

An MoU was signed with the Ministry of Housing’s Building Technology Stimulus Program to support projects approved by the program through incentives and subsidies, with the aim of creating jobs and contributing to the development of domestic advanced construction industries. Spanning a total area of 34,000 m² Spanning an area of more than 60,000 m²

Factories will promote further ventures in the food industry and create 600 jobs Venture will create 1,000 jobs

• A purpose-built factory at Dammam Second Industrial City was • The Science Technology Company will build a complex for military Modon joined the National Industrial Development and Logistics Program’s (NIDLP) logistics committee to promote logistical services and reinforce handed over to Italian electronics company CEG to develop unin- industries at Al-Kharj Industrial City; it has an investment value of the authority’s position in this sector. terruptible power supply (UPS) units more than SAR70 million ($18.67 million)

Phase one of this venture carries an investment value of SAR8.5 million ($2.27 million). Spans an area of around 27,000 m²

Two agreements were signed with the Social Development Bank and Saudi Electricity Company (SEC) during the launch of NIDLP initiatives. 58 Annual Report 2019 59

Encouragement of Private Sector Investment Attracting General Investment

An MoU was signed with the Saudi Basic Industries Corporation (SABIC) to foster local output through its Nusaned initiative. Around 200 small and medium enterprises and 60 companies identified as high value will be supported by the • An MoU was signed with Chinese company Sky Group to build a agreement through qualification and training programs as well as financial support schemes. stone processing factory at Dammam Second Industrial City; the aim of the venture is to support the mining sector. Features: • Supporting small and medium enterprises Total investment value of SAR90 million • Attracting unique investments ($24 million) • Activation of palms and dates centers • Boosting factories’ productivity • Building capabilities Spans a total area of 100,000 m²

A cooperation agreement signed with Banque Saudi Fransi will support small and medium enterprises in industrial cities • An agreement signed with TEDA Holding Company during Crown through various mechanisms. Prince Mohammed bin Salman bin Abdulaziz A-Saud’s visit to China aims to attract investment to the Kingdom Features: • Annual rental discount on purpose-built factories It is expected that the partnership will generate • Bank financing for 150 to 250 projects investment worth SAR1 billion ($266.67 million) • Provision of services to help build capabilities for around 300 beneficiaries

The Aramco Entrepreneurship Center (Wa’ed) will work with Modon to support entrepreneurs through various mechanisms. Spans a total area of 1 million m2

Features: • Annual rental discount on purpose-built factories • Financing activities that will add high value to industry • Provision of services to help build capabilities for around 500 beneficiaries Will create 2,500 jobs

• An MoU was agreed with Euro Pharma Company to establish a pharmaceutical factory at Sudair City for Industry and Businesses; An agreement signed with Asharqia Chamber will support and empower women entrepreneurs through various initiatives. the partnership will aim to promote further support for the health- care sector. Features: • Establishment of specialized industrial complexes Total investment value of SAR410 million ($109.33 • Development of joint products million) • Provision of educational and awareness services for women entrepreneurs • Knowledge exchanges

The partnership recorded its first success with the construction of a specialized fashion and cosmetics complex. Covers a total area of 60,000 m2 Dammam Third Industrial City 60 Annual Report 2019 61

National Productivity Program Comprehensive Observer Program

Under the umbrella approved by the three stakeholders and comprehensively As part of efforts to increase the efficiency and quality of productivity, safety and environmental health as well as of the NIDLP assess and develop transformation plans for them. SIDF periodic visits to industrial facilities and integrate our in- reviewing employee demographics. A total of 3,756 visits will be responsible for evaluating the feasibility studies spection practices with those of the government’s super- were conducted in 2019. and financing the factories while KACST works on assess- visory authorities, the Comprehensive Observer Program The inspections revealed an increase in the number of em- The National Productivity Program aims to improve local ing technologies identified to facilitate improvements. was launched in 2019. This initiative aims to streamline ployees working in our industrial cities to 517,242, includ- output, foster promising non-oil industries and help The first phase of the program commenced in April 2019 inspection visits and work towards effective evaluation of ing 184,000 Saudi men and 16,825 Saudi women. manufacturing companies achieve the highest level of with the identification and evaluation of an initial 20 productive efficiency. To fulfill these goals, the programs factories in cooperation with General Electric. The second developed transformation strategies that will apply prin- phase involving 40 more will start in 2020. Three work- ciples of operational excellence and Industry 4.0 technolo- shops in Riyadh, Jeddah and Dammam that introduced gies in 100 operating factories so they become models for the program to more than 200 factory representatives and Comprehensive other manufacturers to follow. covered selection criteria were also held. At the time of Observer Program 3,756 517,242 184,000 16,825 In 2019, Modon and the Saudi Industrial Development writing, 15 factories had been evaluated and 10 transfor- visits employees Saudi men Saudi women Fund (SIDF) signed a cooperation agreement with King Ab- mation plans delivered to them. dulaziz City for Science and Technology (KACST) where we would identify suitable factories based on specific criteria

Program Impact:

The initiative has had an immediate and quantifiable effect; one factory implemented solutions proposed in its 90% respective evaluation and increased productivity by 90 percent.

Riyadh Second Industrial City 62 Annual Report 2019 63

Business Incubators Conducive Environment and Business Value

Modon launched a It carries the aim of supporting entrepreneurs, owners of need to start their own private businesses. For example, Modon has worked hard to build an environment that logistics sectors and the creation of a sustainable invest- project to establish small projects and local stakeholders with an interest in space has been allocated inside factories so that end prod- encourages creativity, innovation and investment in do- ment environment. a business incubator the food industries. We utilized existing factories and fa- ucts could be effectively marketed. mestic-based industries as well as providing added value In 2019, we have been committed to developing robust inside a factory. cilities that already have the infrastructure entrepreneurs to our partners and stakeholders. partnerships with the public, private and charity sectors This is evident in our efforts to develop the industrial and achieving integration with regulatory bodies in order sector and facilitate improvements in partner experience. to reduce bureaucracy levels for investors and entrepre- By doing so, we aim to meet Saudi Vision 2030 objectives neurs, in turn contributing to efforts to attract and grow that target significant development in the industrial and investments that add value to the Saudi economy.

The business incubators will add value at commu- The business incubators will add value to entre- Business Development nity level by preneurs by

• contributing to and supporting the national economy; • creating new channels and markets for entrepreneurs’ products; No. of contracts No. of contracts • encouraging the manufacture of local materials that are then branded • potentially increasing income for entrepreneurs; in operation

as domestically-produced goods; • creating more job opportunities that appeal and cater to the 2018 6,190 3,474 • increasing focus on manufacturing industries; national workforce;

• providing various employment opportunities in modern specializations; • encouraging the use of modern technology across small indus- 2019 6,254 3,600

• developing supply chains; tries to increase productivity; and

• helping to meet the need for rare products and services; • providing integrated services for entrepreneurs at a nominal

• creating positive competition in the market that then benefits the cost.

consumer; and

• promoting competitive prices through phasing out imported products

and services and replacing them with local ones. 64 Annual Report 2019 65

How Modon Supports Industrial Productivity

Logistical services Communication services Nurseries Commercial complexes

• Modon partnered with Aljomaih Holding Company to Modon partnered with the Ministry of Communications Modon signed an MoU with Tatweer to provide our We are committed to meeting the needs of industry and develop warehouses at Al-Ahsa First Industrial City. and Information Technology to install fiberoptic technology industrial cities with nurseries. The proposed facilities will entrepreneurs working with us; to achieve this, we have Spanning a total area of 30,000 m2, the warehouses in several of our industrial cities. By doing so, we improved meet the Ministry of Education’s children safety standards established commercial complexes in several of our cities. will substantially improve the quality of logistical communication services in these cities to the highest and also comply with our engineering and safety criteria. Notable examples where these facilities operate include services in the industrial cities and have a positive possible quality levels and given manufacturers operating We hope that once completed, they will encourage more Qassim First Industrial City, Al-Ahsa First Industrial City impact on efforts to better support industry in Saudi there the means to initiate digital transformation of their women to join us and contribute towards our ongoing and Hail Industrial City. Arabia. services. Jeddah Second and Third industrial cities, Sudair development, while meeting NIDLP objectives. • We are working with Naqel to establish a logistics City for Industry and Businesses, Al-Kharj Industrial City zone at Ar’ar Industrial city to improve Modon’s logis- and Dammam Third Industrial City all received fiberoptic tical capacity. The new facilities will cover a total area upgrades. Construction materials zones were also provided of 30,000 m2 and stimulate export/import exchange with such technology at no additional cost. with neighboring countries. Fuel stations Restaurants and coffee shops • Modon signed a contract with Logipoint to construct a smart logistics zone covering a total area of 119,000 Digital transformation m2 at Jeddah First Industrial City. The streamlined An important part of our strategies is to provide support Ensuring our partners have access to food and recreation- nature of the new facilities will contribute to less con- services to our partners and local motorists by signing al facilities is an important consideration in our design gestion and increase logistical services in the city. We completed digital transformation plans for nine facto- contracts to build gas stations and logistics centers. Once processes. With this in mind, Modon signed contracts with • Two contracts were signed with Starlinks to establish ries operating in our industrial cities, partnering with the completed, they provide tailored services for vehicles and restaurant chains and retail companies to serve our in- storage warehouses at the industrial cities in Tabuk Cement Product Industry Co., National Company For Glass visitors entering industrial cities. dustrial cities. Notable examples where such agreements and Jazan. Once completed, they will span a total Industries, Herfy, SAPIN and Unilever. Once implemented, have been implemented include Qassim First Industrial area of 36,000 m2. these blueprints will facilitate a shift towards Industry 4.0, City, Al-Ahsa First Industrial City, Hail Industrial City and • We also signed 11 contracts to facilitate logistics improving productivity and increasing revenue by over 30 Jeddah First Industrial City. investments that will cover an estimated area of percent. 175,000 m2 once completed. The aim of these deals Banking services is to increase the total area allocated for logistical services in our industrial cities by 60 percent. Transport and goods shipping Part of Modon’s commitment to investors is to provide a comprehensive portfolio of services including banking fa- cilities. To this end, we worked hard to attract investment An MoU was signed with the Transport General Authority projects from the financial sector to our industrial cities in to integrate our systems and improve shipment tracking. order to meet the demand for such services; bank branch- The aim of the agreement is to better organize and moni- es and ATMs were subsequently set up. Agreements were tor goods transported by truck from industrial cities across signed with Arab National Bank (ANB), National Com- the Kingdom and help us better realize NIDLP objectives. mercial Bank (NCB), Al-Rajhi Bank, Riyad Bank, SABB and Alinma Bank. 66 Annual Report 2019 67

“Modon contributes to the creation of a fully integrated industrial environment through the provision of land and infrastructure that meet the requirements of a sector led by young ambitious leaders”

HE Mr. Bandar I. Al-Khorayef Minister of Industry and Mineral Resources

Wa’ad Al-Shamal Industrial City 68 Annual Report 2019 69

Ensuring a high level of operational quality Chapter Three has been a cornerstone of Modon’s corporate performance over the course of the authority’s history, enabling us to achieve competitive 68 Corporate Performance advantage and overcome different challenges to our business. As a result, we are consistently 70 Operational Excellence recognized as one of the best organizations 86 Human Capital worldwide when it comes to performance and 90 Digital Transformation conducting business. 92 Communication and Empowerment This chapter will outline the elements of our 96 Social Responsibility corporate performance that have underlined 102 Financial Performance our consistently high levels of productivity. 106 Internal Audit 70 Annual Report 2019 71

2018 2019 Operational Excellence Business growth

In 2019, Modon stepped up efforts to improve investor better placed to meet our partners’ various requirements experience by developing fully-integrated industrial in the industrial sector. We also embedded greater flexibil- No. of approved plans environments, contributing to Saudi Arabia’s reputation ity across our operations, helping to reduce the efforts 1٫372 1,168 as an attractive investment destination. To achieve this, needed from our investors, suppliers and employees to we diversified our services portfolio, ensuring we were complete investment projects. No. of approved construction licenses 953 845

Supervision and Contracts No. of approved business licenses 5٫619 1,848

Approved industrial plans in 2019 numbered 1,168, with meet the growing demand for industrial land and expand Operational licenses the number of issued construction licenses standing at investment. 845. A total of 1,848 business licenses were also granted to No. of operational licenses 1٫200 1,990

Received contractor requests

No. of contractor qualification requests received 173 116

No. of qualified contractors 24 46

Received requests from engineering consultancy offices and qualified engineering consultancy offices

No. of received requests from engineering consultancy offices 238 527

No. of qualified consultancy offices 78 150

Field inspection visits

No. of inspection visits 8٫471 8٫694 Sudair City for Industry and Businesses Fire Station 72 Annual Report 2019 73

Call Center Environment

The Modon call center handled 37,866 inbound calls from 2018. Our reports system recorded 8,672 tickets compared We established the Modon Environmental Management System (MEMS) in • A specialized qualification scheme to build national competencies. our investor partners in 2019, compared with 40,322 in with 9,596 the previous year. 2013 to develop environmental services in our industrial cities and monitor environmental performance. The end goal of this system is to establish The Modon team was also directly responsible for executing six environmen- sustainable and environmentally-friendly cities. The first phase of MEMS was tal programs covering: implemented in partnership with Fujitsu. The system features eight programs to develop environmental performance, • sanitation; including one to monitor air quality in major industrial cities such as Riyadh • inspections; Second Industrial City, Jeddah First Industrial City and Dammam Second In- • awareness; dustrial City. Two other notable programs are dedicated to emissions testing • assessment of industrial requests; and wastewater monitoring. • rehabilitation; and The second phase of MEMS was launched in 2015 with a new vision and part- • risk assessment. 37,866 96 % 02:03 minutes 7 seconds nership with Saudi Envirozone, which incorporates state-of-the-art French average waiting period total inbound calls response rate average call duration technology in many of its products and services. Programs established during We also supervised the performance of contractors implementing the above this phase covered 15 industrial cities and included the following: programs. We launched the third phase of MEMS the beginning of 2019, again in part- • An initiative to increase the number of air quality assessment stations nership with Saudi Envirozone. More operational in nature, this phase covered to 10 fixed installations and one portable station to ensure wider overall a greater number of industrial cities and focused on the effective implemen- testing coverage. tation of four key programs consisting of: • An environmental audit program for industrial facilities that conforms to 97 % ISO 14001 standards • Operation and maintenance of air-quality assessment stations – 10 fixed 5,208 Modon partner service perfor- • An environmental systems automation program that uses specialized installations and one mobile station. partner care tickets mance rate data models. • Emissions testing. • Implementation of air pollution modeling. • An environmental inspection program that meets ISO 14001 standards. • A quality assurance/quality control program in partnership with Ricar- • Development and operation of MEMS’ electronic systems. do-AEA

8,672 687 Modon partner tickets emergency reports

Dammam Second Industrial City 74 Annual Report 2019 75

Environmental Inspections Emissions Tests

Modon is committed to improving the environmental range and depth. Fifteen industrial cities are currently As part of our assessments into the impact of industrial These solutions were executed by industry experts super- efficiency of industrial facilities by identifying bad prac- covered by the program and to date 448 visits have been operations and emissions on overall air quality, conducted vised by Modon employees. These assessments helped tices and remedying them through a dedicated inspection conducted. in line with local environmental regulations, we calculated us accurately collate data into overall emission levels and program whose scope has been expanded in terms of the concentration levels of suspended particulate matter reduce pollution in our industrial cities. and gaseous pollutants emitted from chimneys at industrial As part of the program, 386 tests were conducted in eight cities. The resulting data was used to identify facilities with industrial cities. The assessments adhered to the standards high emission rates and implement optimal engineering of local regulatory authorities such as the Presidency of Me- solutions to help them reduce their environmental impact. teorology and Environment’s General Environmental Regula- tions and those of international bodies including the United States Environmental Protection Agency and World Bank.

1 4 5 6 4 4 137 7 17 114 4 4 5 3 133 1 6 126 10 9 112 8 103 Businesses Industrial City Industrial City Asir Industrial City Durma Industrial City Qassim Industrial City Al-Ahsa Industrial City Al-Ahsa Industrial City Shaqraa Industrial City Shaqraa Al-Kharj Industrial City Al-Kharj Industrial City Makkah Al-Mukarrama Makkah Al-Mukarrama Makkah Riyadh First Industrial City Riyadh Jeddah First Industrial City Jeddah First Industrial City Jeddah Third Industrial City Third Jeddah Sudair City for Industry and Sudair City for Riyadh Second Industrial City Second Riyadh Industrial City Second Riyadh Jeddah Second Industrial City Jeddah Second Industrial City Jeddah Second Dammam First Industrial City Dammam First Industrial City Dammam Second Industrial City Dammam Second Industrial City Dammam Second high-potential citiesandprovide uswithnecessary infor cover. The mobilestation hasbeenassigned to lookafter meteorological conditions the10industrial citiesthey of tent data steamof abouttheenvironmental status and a mobilestation. These installations provide aconsis- stations before they were increased to 10inadditionto Modon initiallyhadthree fixed airqualitymonitoring 76 Air QualityStations Fixed stations’ operational hours Wa’ad Al-Shamal Industrial City 8,500

Sudair City for Industry and Businesses 9,500

Al-Madina Al-Munawwara Industrial City 9,500

Jeddah Second Industrial City 26,000 - allocated. best fitthere andhow theirdifferent zones shouldbe future by determiningwhat would anindustry typesof The resultant data helpsusoptimallyplanfor thecities’ mation to assesstheirgeneral environmental conditions.

Jeddah First Industrial City 25,000

Al-Ahsa Industrial City 26,500

Dammam First Industrial City 26,500

Dammam Second Industrial City 49,000 Annual Report 2019 Al-Kharj Industrial City 49,000

Riyadh Second Industrial City 49,000

Makkah Al-Mukarrama Mobile station’s operational hours Industrial City 4,400

Asir Industrial City 2,400

Riyadh Second Industrial City 2,500

Jeddah Third Industrial City 2,200

Qassim Industrial City 2,500

Dammam Second Industrial City 2,500

Wa’ad Al-Shamal Industrial City 3,000

Riyadh First Industrial City 2,800

Al-Madina Al-Munawwara Industrial City 2,400

Al-Ahsa Industrial City 3,000

Dammam First Industrial City 4,000 77 78 Annual Report 2019 79

Afforestation Etmaen

Modon is committed to developing afforestation projects ronment, Water and Agriculture to plant 1 million trees in To ensure food facilities operating in the industrial cities prepared to deliver its results. Derived from the Hazard and increasing the numbers of trees in industrial cities industrial cities across the Kingdom as part of our initia- are complying with food safety regulations and standards, Analysis Critical Control Point (HACCP) system and Good as they help offset the environmental impact of our tive to facilitate afforestation and encourage the growth Modon implemented its Etmaen classification program. Manufacturing Practices (GMP), the Intelligent Inspection operations. So far 63,000 trees have been planted, while of natural vegetation. These agreements are an integral Using several digital systems, the program collects and Program is based on a rigorous and accurate methodology the total area of green spaces has been increased to over part of our objective to protect the environment, support analyzes data to ensure food safety and continued ap- to help deliver excellent food safety management and 1.8 million m2 of landscaping, trees, lakes and fountains. wildlife and reduce the impact of desertification. plication of the highest standards. Etmaen incorporates ensure confidence in the production of such goods within Several MoUs have been signed with the Ministry of Envi- the Intelligent Inspection Program as well as the analyses our industrial cities. of food products and the environments where they are Modon’s target is to plant Program Goals 1 Million trees across our industrial cities

Improve enterprises’ compli- Ensure food facilities working ance with food safety require- with Modon are among the Water ments to ensure the provision world’s best with regards to of safe products for consumers. food safety standards.

Modon has an integrated plan to provide water services irrigation networks. Over the course of 2019, Modon has and facilities in our industrial cities through new pota- worked with our partners to ensure the quality provision ble water pumping stations and wastewater treatment of water services, maintain sustainability and recycle this plants. Other facilities include water tanks and expanded precious resource wherever possible. Work towards achieving the highest food safety standards Reduce complaints about at small and medium enter- food-related diseases. prises.

Etmaen is applied to all food facilities operating in the record the results of the inspection, which covers hygiene industrial cities that prepare, process and deliver meals, levels, storage methods, implements used and tempera- including catering centers, restaurants and fast-food tures throughout the premises, among other measures. outlets. Inspections are scheduled electronically through Following the visit, the data is entered into the Intelligent the Intelligent Inspection Program system, which takes Inspection Program system, which then assigns a mark to into account historical risk assessments of the facility the facility based on its overall food safety performance. in question. When a visit is conducted, employees are The mark is recorded on an appropriately colored card evaluated on how compliant they are in meeting health fixed prominently at the facility’s entrance. There are six standards and regulations. Electronic devices are used to different marks that can be issued, as described below:

Riyadh Second Industrial City 80 Annual Report 2019 81

Etmaen Performance Classification Projects Implemented in the Services Sector

Platinum: Excellent performance Green: Very good performance Modon’s robust food safety management system incorpo- The facility has demonstrated an excellent level of The facility has demonstrated a very good level of com- rates the following services: compliance with Modon’s food safety regulations pliance with Modon’s food safety regulations and stan- and standards. The level of compliance of the facility’s dards. The level of compliance of the facility’s adminis- 1 2 administration with food safety management require- tration with food safety management requirements is at ments is at a high standard. a very good standard. Investors can process various administrative transactions Risk assessment principles are used to determine how fre- electronically, including: quently premises are visited, as follows:

Yellow: Good performance Orange: Acceptable performance The facility has demonstrated a good level of compliance The facility has demonstrated an acceptable level of compli- • Facilities that engage in high-risk activities are visited twice with Modon’s food safety regulations and standards. ance with Modon’s food safety regulations and standards. a month. • Facilities that engage in medium-risk activities are visited The level of compliance of the facility’s administration The level of compliance of the facility’s administration with • Issuance/renewal of professional licenses. once a month. • Issuance/renewal of health certificates for workers in food with food safety management requirements is at a good food safety management requirements is at an acceptable • Facilities that engage in low-risk activities are visited once facilities. standard. However, there are areas for improvement. standard. However, there are areas for improvement. every 45 days. • Issuance of responses to the results of inspection visits. • More than 800 food samples have been collected and over 4,000 tests conducted to detect whether contaminants are present in tested premises. Red: Poor performance Deferred classification The facility has demonstrated a poor level of compliance Classification is deferred until the facility takes the 3 4 with Modon’s food safety regulations and standards necessary measures to rectify its inadequate level of The classification system used to rate the safety performance and must be closed until it implements the necessary compliance with Modon’s food safety regulations and of facilities was developed in line with global scientific criteria More than 1,200 workers were asked to engage in field-based and modeled on other similar systems internationally. We measures to rectify this. standards. awareness and education programs during the inspection expect this initiative to have a positive impact on encouraging visits. facilities to comply with the highest food safety standards.

5 6 Modon has worked to develop and improve the efficiency of its own Operational manuals were developed to serve as standard working environment to ensure a positive impact across operations. reference points for food safety procedures and best practices. We enrolled team members closely involved in health and safety Examples include: inspections in specialist training courses in order to stay abreast of Combating Commercial Fraud Mobile Food Trucks developments in improving workplace environments.

Modon obliges owners of food facilities to submit information Modon has created environments where the owners of food regarding the source and quality of their perishable ingredients in trucks can safely operate. These sites have been developed in line a transparent manner. A set of standards have been implemented with the appropriate food and safety standards. • An operational manual for food facilities regarding how such data is disseminated. • A guide to collection of food samples • A control procedures manual 82 Annual Report 2019 83

Safety and Security Safety Visits

Modon is committed to developing a working environment safe for mental policy – an important component of a balanced strategy to Modon conducts periodic inspections to ensure fire-safety storage facilities, while reporting any observations related 2٫890 our employees, partners’ assets and local communities. To achieve achieve sustainable development across our industrial cities. The systems in factories are working according to agreed stan- to hazards, developing corrective measures and monitor- field visits this, we have adopted a holistic safety, security, health and environ- following initiatives were implemented to help fulfill this key policy: dards. We also check for chemical leaks and the security of ing that they are being implemented.

Occupational safety and security standards were applied and monitoring processes set up to ensure industrial facil- ities are fully compliant. Experts in safety and security were also appointed to train employees and raise awareness on preventative measures that could be implemented. Our standards are focused on improving industrial safety and Special Firefighting Teams security in order to protect local communities, mitigate risk and preserve the environment.

We have been committed to implementing firefighting Work is currently underway to install a rapid response unit and rescue systems in our industrial cities to ensure fast at Asir Industrial City. Fire-safety systems and factories A safety management system based on the ISO 45001 standard was established that aims to improve operational response rates in the event of an emergency. at industrial cities are connected through an integrated practices. In 2019, Modon launched five fire stations in the following smart system that triggers an alarm in the event of an industrial cities: emergency; this allows firefighting teams to respond Sudair City for Industry and Businesses, Al-Kharj Industrial swiftly and minimize the chances of any casualties and/or An electronic system was implemented to support our overall safety management framework. It is centered around City, Al-Madina Al-Munawwara Industrial City, Dammam material losses occurring. five key components focusing on inspections, follow-up of corrective measures, risk assessment, safety audits and Third Industrial City, and Jeddah Second Industrial City. issuance of business licenses. Industrial Security Our 1920 hotline number was activated to receive reports related to safety and security 24 hours a day. The service is an important component of our general emergency response plan designed to increase preparation levels and response times. A number of projects to develop industrial security solutions through the recruitment of qualified personnel services and promote general safety are currently being and installation of state-of-the-art technology. Security implemented and have already had a positive impact in vehicles have been equipped with advanced tracking terms of improving security performance and reducing systems and surveillance cameras to support our teams’ Factories in our industrial cities have been classified based on their potential hazards. This was achieved by monitor- violations. We also launched initiatives to effectively mon- efforts to ensure a safe environment where our facilities ing factories’ compliance with safety regulations on a monthly basis through comprehensive inspection visits. itor our facilities and develop holistic safety and security are well protected.

Mock evacuation plans were developed as part of a general emergency action strategy. Fourteen drills were carried Operation and Maintenance out over 2019 at the headquarters of these selected industrial cities: Riyadh First Industrial City, Riyadh Second Indus- trial City, Dammam First Industrial City, Dammam Second Industrial City, Jeddah First Industrial City, Jeddah Second Industrial City, Sudair City for Industry and Businesses, Al-Kharj Industrial City, Al-Madina Al-Munawwara Industrial Modon has focused on improving operational efficiency and specific procedures and policies to help reduce City, Al-Ahsa Industrial City. and quality with regards to operations and maintenance operation and maintenance costs in industrial cities and work by utilizing state-of-the-art technology. The further develop services provided to partners. authority also developed quality assessment indicators Four key emergency response plans were implemented in partnership with the Civil Defense, Saudi Red Crescent and the Saudi Industrial Development Fund (SIDF). 84 Annual Report 2019 85

National Competencies Empowerment Saudi women employees at industrial cities

Modon has developed key strategies as part of an ob- growth. We have sought to ensure an appropriate working jective to cultivate Saudi talent in line with Saudi Vision environment for our Saudi employees in our industrial Al-Ahsa First Industrial City 290 2030, which states that a workforce drawn from the na- cities through the following initiatives: Al-Kharj Industrial City tional pool is the optimal way to facilitate industrial sector 166 Dammam First Industrial City 362 1 2 Dammam Third Industrial City Working with governmental authorities to Ensuring the provision of suitable quality 9 develop and facilitate services. commercial services for employees. Dammam Second Industrial City 1,447 Riyadh First Industrial City 81 3 4 Riyadh Third Industrial City Construction and leasing out of retail space. Establishment of clinic complexes and 5 medical clinics. Riyadh Second Industrial City 4,217 Qassim First Industrial City 255 Al-Madina Al-Munawwara Industrial City 322 Encouraging Women to Work in the Industrial Sector Tabuk Industrial City 10 Jazan Industrial City 3 Ensuring a greater role for women in Modon’s operations Jeddah First Industrial City 7,711 is an important component of a vision that emphasizes Jeddah Third Industrial City the importance of female workers in the national 285 labor market. We aim to create appropriate working Jeddah Second Industrial City 433 environments for our women employees so they can contribute effectively to the management of key projects Hail Industrial City 197 and investments. The authority has created tailored Sudair City for Industry zones with nurseries and drop-off/pick-up points as and Businesses 102 well as medical and recreational centers. There are Asir Industrial City 457 also dedicated areas where women-owned small and Makkah Al-Mukarrama medium enterprises and handicraft projects operate. Industrial City 463 These facilities have been developed with the aim of Najran Industrial City meeting Saudi Vision 2030 goal that wants to ensure 10 women play an active part across all sectors. As a result of these initiatives, the number of women employees in our Total industrial cities has steadily grown to around 16,825 as of 16,825 2019.

Riyadh Second Industrial City 86 Annual Report 2019 87

Human Capital Training Programs

Modon’s strategy to attract the best talents and develop expertise to carry out their roles. Over the course of 2019, Providing high-quality technical training programs and to our employees’ annual objectives and ability to achieve them aims to empower the Kingdom’s human resources. Modon was able to build an impressive track record in courses for employees is central to achieving our oper- them. In 2019, several developmental plans and programs We are also working towards the cultivation of a knowl- recruiting employees with outstanding levels of compe- ational objectives and creating a working environment were implemented for 287 employees that covered – but edge economy led by talented Saudi men and women by tence and expertise and developed a working environ- that motivates our workforce and supports professional not limited to – the following: harnessing human capital, utilizing training programs ment that fosters innovation across all our businesses. development. The training that Modon provides is linked effectively and ensuring employees have the necessary • Total Quality Management (TQM) • Business Process Re-Engineering (BPR) • key performance indicators (KPIs) and balanced score- card (BSC) • development of economic feasibility studies • agricultural engineering and irrigation engineering 398 396 2 383 15 34 • effective budgeting and cost control Total employees Saudi Non-Saudi Men Women Average age • qualification program and test for VAT specialists • professional risk management Accreditation Awarding Body • excellence in IT management Talent Development • supply chain management • value engineering Project Management Professional Project Management Institute

Modon launched a talent management initiative to We are also committed to providing our workforce with IFMA SFP Sustainability Facility Profes- International Facility Management identify talented individuals and develop them in order opportunities to gain global accreditation as part of our sional® Association‎ to ensure business sustainability. To achieve this goal, a employee development strategy. A plan was created for 15 learning and development framework was formulated employees to complete such certifications with a view to that led to the creation of Future Leaders – a program that improving management systems and frameworks so that Six Sigma Council for Six Sigma Certification aims to cultivate and harness the potential of individuals they matched international standards. Obtained accredi- expected to lead the business into our next era of success. tations are outlined in the table below: These employees are earmarked to take up leadership ISO 14001 Lead Auditor British Standards Institution positions through a competitive selection process that rewards those who have demonstrated a high level of performance and met the required competencies. They OSHA General OSHAcademy are then enrolled onto a tailored training and develop- ment program and are expected to form a core part of our ISO 45001 Occupational health and International Organization for Stan- future succession plans. safety dardization

The National Examination Board in NEBOSH Diploma Occupational Safety and Health

The Chartered Institute of Personnel CIPD L3 Riyadh Second Industrial City and Development 88 Annual Report 2019 89

Modon Academy Talent Acquisition

As part of efforts to invest in our human capital and create remotely. Modon Online Academy provides a wide variety Modon’s HR team has worked hard to diversify its re- recognized them as the best talent acquisition team in the a modern education-focused environment, we launched of training programs and courses in many fields including cruitment processes and attract the very best talents in MENA region. the Modon Online Academy. This learning and training business skills, finance, IT and health and professional their respective fields. As a result of its efforts, LinkedIn electronic platform aims to promote self-learning by safety. allowing employees to develop their knowledge and skills

360 Degree Feedback

In line with Modon’s ongoing commitment to improving good performance in certain competencies. This evalua- staff performance, the 360 Degree Feedback performance tion process is carried out by the team, colleagues and line appraisal system was launched. Employees are evaluat- manager. ed based on whether they are meeting their objectives, adhering to organizational values and demonstrating

Motivated Working Environment

Modon aims to foster a motivated workforce by launching many initiatives and incentives to promote healthy com- petition among employees, including:

WalaPlus, a program that delivers the latest offers and promotions for employees and their families.

A flexible working scheme where employees can work a full eight-hour shift anytime between 7 a.m. to 4.30 p.m.

My Services, an application that enables employees to access a series of authority-related services online – part of an ongoing Modon commitment to move towards providing electronic services and automated processes. Riyadh Second Industrial City 90 Annual Report 2019 91

Digital Transformation

Modon is committed to developing its digital infrastruc- nizations listed on the Maturity Index and linked to the ture and implementing the best systems to support em- E-Correspondence System that works towards facilitating ployees. The aim is to create a flexible and safe working a paperless government. The authority also won a corpo- environment that best supports the authority’s efforts to rate excellence award for its idea to create an electronic achieve digital transformation. In 2019, Modon was given branch as well as an innovation award for an IT operations the platinum classification awarded to the top 15 orga- governance project. Key digital transformation operations in 2019

• Modon’s internal and external portals was launched to provide • A project to monitor the performance of digital applications and partners with easy access to services, information and interactive transactions was implemented. content. • A new Uninterruptible Power Supply (UPS) system was installed • Fire stations were linked to headquarters in several industrial cities, at our data center to ensure continuity and stability of power and allowing firefighters working there to receive emergency calls di- sustain electronic services. rectly or via an internal network; this was facilitated in the following • An electronic branch project that facilitates transactions and services cities: Sudair City for Industry and Businesses, Wa’ad Al-Shamal for Modon’s partners was implemented, reducing the time needed Industrial City, Dammam Third Industrial City, Jeddah Second Indus- to deliver services and respond to specialized inquiries as well as trial City, Al-Kharj Industrial City expanding service coverage in the industrial cities. • Communications rooms at branches were improved to increase their • Modon’s current cybersecurity systems were upgraded to further sustainability, efficiency and quality and better facilitate mainte- reduce the risk of any attacks occurring. nance work. • An internal firewall project that improves the security of Modon • Backup systems were improved with the aim of increasing efficiency servers and counters security threats was implemented. and quality and ensuring the availability of data locally and external- • Information security awareness programs were held for employees ly in case of an unexpected cyber emergency. to increase their understanding of security risks and how to counter • Server infrastructure was improved to enable direct deployment, them. increase efficiency and quality and minimize risk. • A customer relationship management (CRM) system was introduced • The IT services portal was developed and subsequently improved to that integrates multiple evaluation channels for Modon’s partners increase its efficiency and responsiveness, ensuring the provision of such as e-Modon, mobile apps, an electronic portal and SMS. a high-quality service. • Nineteen user manuals for the e-Modon system’s key services were • A network coverage rate of 98.8 percent was achieved for all indus- developed. trial cities and the headquarters in 2019. • An automated contract amendment service was launched. • Tickets submitted to the IT portal system were resolved with a high • A comprehensive content management system that facilitates file satisfaction rate as a result of measures to increase the quality and archiving and storage services and their integration with key Modon continuity of IT services while ensuring employee satisfaction. systems was implemented; employees across our departments were • Internet of Things (IoT) technology was implemented in our commu- trained on how to use the facility. nications rooms to maintain their efficiency, monitor temperature • Integration with the Bayan Credit Bureau Company, Saudi Credit and humidity levels and minimize service interruptions. Bureau (Simah) and Meras government program was implemented. • A video calling system was installed at Modon headquarters and its branches to facilitate communication, meetings and presentations.

Dammam Second Industrial City 92 Annual Report 2019 93

Communication and Empowerment External Relations

A dynamic system that incorporates the latest advances The Modon brand is a reflection of future aspirations to Participation in exhibitions and conferences is a central maximize their investment and industrial benefits – a key in corporate communications and media and utilizes a progress and expand planning of the country’s industrial component of Modon’s communications strategy. Involve- theme of business strategy. Exhibitions and conferences diverse range of communication methods is central to cities. At its core is a vision to develop industrial cities ment in these events helped publicize the authority’s were also a channel to build relationships with potential Modon’s operations. We have focused on improving the in line with the directions of Saudi Vision 2030 and an integrated services and products and enable partners to new partners. effectiveness and range of our communications platforms organization-wide approach that focuses on uplifting the to promote a fresh and modern brand identity. industrial sector and a maximized contribution to the national gross domestic product. Arab Health Exhibition and Congress Transport and Logistics Conference Publishing and Media

To improve the effectiveness of internal and external disseminating business updates and events. The system Saudi-Indian convention on the sidelines of communications, Modon has developed an electronic has the following goals: Crown Prince Mohammed bin Salman bin Ab- GITEX Exhibition publishing and communication system that focuses on dulaziz Al-Saud’s visit

• An increase in Modon’s social media following by a third, equivalent to 295,445 followers. Saudi-Chinese convention on the sidelines of • An increase in local and international press coverage to raise awareness of the sheer scale of the Kingdom’s industrial achievements. Crown Prince Mohammed bin Salman bin Ab- Automotive Industry Conference dulaziz Al-Saud’s visit

Saudi-German Industrial Cooperation event on Supplier Investment Opportunities Forum / the sidelines of the Hannover Messe Aramco

11 295,445 74 pieces of media coverage, 11 press releases TV interviews social media followers including success stories The Eleventh Supply Chains Conference Saudi-German Business Forum 94 Annual Report 2019 95

Exhibitions, Conferences and Forums

Saudi Food and Drug Authority (SFDA) Annual Global Health Exhibition in Riyadh Conference and Exhibition 2019 in Riyadh

Saudi Logistics Conference in Riyadh Saudi-Russian Investment Forum in Riyadh

Industrial Enablement Workshop in Al-Jouf Industrial Enablement Workshop in Qassim Future Factory Conference in Riyadh Iron Steel Conference in Riyadh

Digital Transformation for Government Agencies Forum Saudi Transport and Logistics Conference in Riyadh in Riyadh

Forum and Exhibition of Young Men and Women of 1st Saudi Workplace Health, Safety, Environmental and Eastern Business 2019 Wellbeing Conference & Exhibition in Dammam

First Economic Forum for Sponsors of Small and Medium Biban Hail Forum Enterprises in Ar’ar Industrial Enablement Workshop in Jazan Industrial Enablement Workshop in Al-Ahsa

Industrial Enablement Workshop in Al-Baha Industrial Small and Medium Enterprises Forum in Yanbu City Future Factory Show: Industrial Enablement Workshop in Qassim First Industrial Enablement Workshop in Jazan Industrial City Industrial City Adoption of Industry 4.0 technologies, as facilitated by the field with the aim of increasing knowledge and sharing National Productivity Program, carries the aim of encour- best practices and global trends. Industrial Enablement Workshop in Ar’ar Industrial City Industrial Enablement Workshop in Al-Ahsa Industrial aging industrial companies working with us to digitally We are also aiming to launch an initiative that promotes City transform their operations. digital transformation in factories by promoting appro- To this end, Modon organized the Future Factory Show in priate digital enablers. The idea is that our partners will 2019, the start of a series of such events on Industry 4.0. eventually adopt Industry 4.0 technologies if they are en- The conference explored international experiences in this couraged to embrace open source services and solutions. 96 Annual Report 2019 97

Social Responsibility

Event Summary Location Event Summary Location

• Jeddah First Industrial City • Qassim First Industrial City Modon held a joint workshop with the Human Resources • Al-Madina Al-Munawwara Blood donation campaigns Annual blood donation campaigns held in the industrial cities HRDF Workshop • Riyadh Second Industrial City Development Fund (HRDF) Industrial City • Asir Industrial City

As part of a strategic partnership agreement with King Abdulaziz University, a series of training and scientific Solar and energy efficiency Workshop held on solar and energy efficiency solutions and • Jeddah First Industrial City Training and scientific courses courses were held to help achieve the objective of meeting • Headquarters solutions workshop how to utilize them effectively the industrial sector’s labor needs and contribute towards achieving Industry 4.0

Awareness campaigns were launched across Modon’s • Jeddah First Industrial City Workshop held under the joint training program between Environment protection businesses in cooperation with Tadweer to help protect Joint training program workshop • Riyadh Second Industrial City • Riyadh Second Industrial City King Saud University (KSU) and 30 food factories awareness campaigns the environment through the donation of old and broken • Dammam Second Industrial City equipment

Modon launched its second sports tournament with the aim Awareness program organized by Modon for male and female The second Modon sports • Jeddah First Industrial City Modon Tech project • Dammam Second Industrial City of promoting exercise among the industrial community; 84 students on the future of industry and Industry 4.0 tournament • Riyadh Second Industrial City teams participated

Introductory workshop held to introduce Modon’s industrial The Alzheimer’s campaign was launched to raise awareness • Jeddah First Industrial City • Al-Madina Al-Munawwara Modon introductory workshop services and products to members of the Chamber of Alzheimer’s Disease campaign of the disease and its symptoms and educate employees on • Riyadh Second Industrial City Industrial City Commerce and Industry in Madina how to sensitively deal with such patients • Dammam Second Industrial City

• Jeddah First Industrial City Modon cooperated with the Saudi Patient Safety Center • Jeddah Second Industrial City Productive efficiency workshops Modon held productive efficiency workshops - GE in three Awareness campaign to • Riyadh Second Industrial City (SPSC) to launch an awareness campaign to empower • Riyadh Second Industrial City - GE industrial cities empower patients • Dammam Second Industrial City patients, with materials translated in several languages • Dammam Second Industrial City

• Jeddah First Industrial City • Riyadh Second Industrial City Modon launched the Health Zone event with Tawuniya’s • Dammam Second Industrial City Health Zone event • Headquarters Industrial awareness workshops were held to introduce the participation Industrial awareness workshops • Al-Madina Al-Munawwara basics of developing industrial city infrastructure Industrial City • Qassim First Industrial City 98 Annual Report 2019 99

Awards and Certificates

Over 2019, Modon received several awards and certificates national transformation objectives. Three key accolades that serve as further testament to the authority’s market- are described below. leading approach and strategies that aim to achieve

Cooperative training program workshop Health Zone event

Firstly, the authority was awarded the Secondly, we also won the Customer Finally, Modon received the Corporate Excellence in Geographic Information Service Excellence Award for an electronic Excellence Award for Innovation in Using Systems (GIS) Implementation Award branch project that serves industrial cities Technology for successfully implementing (EGI) 2019 for demonstrating distinction with no on-site administrative branches a digital interactive platform project. This in its innovative and scientific approach. and/or small numbers of employees. This initiative forms part of our overall digital Second Modon sports tournament Blood donation campaigns This award was first introduced in 2007 in initiative reduces the costs associated transformation strategy and targets Dubai. with setting up and operating administra- potential partners. Visitors accessing tive branches, facilitates services elec- the platform are introduced to Modon tronically and provides fresh solutions for through a short film before being given a Modon’s partners. virtual tour around the industrial cities. They can then access details about each city including infrastructure, current and targeted industries and available invest- ment opportunities; this data is updated automatically through our GIS. The tour concludes with a detailed report about the industrial city potential partners are particularly interested in, and they are then able to apply for a related product or investment opportunity.

Awareness campaign to empower patients Participants at Modon Tech project 100 Annual Report 2019 101

Modon Lake

As part of its firm commitment to playing a beneficial role in the local communities where industrial cities operate, Modon established the Kingdom’s largest developed industrial lake in Dammam Second Industrial City. Called the Modon Lake, it is composed fully of renewable water treated in an environmentally-friendly manner. The project covers around 400,000 square meters, with the lake itself accounting for just over half of the total area. Green spaces and 760 palm trees have been installed in an aesthetically pleasing geometric formation, while pedestrians can explore the location by walking on path- ways around four kilometers in total length. There is also a 10-kilometer walkway that visitors can use to access the lake as well as fountains and a park.

Modon Lake 102 Annual Report 2019 103

Financial Performance Key revenue streams for fiscal year 1440/1441 AH (2019)

Modon’s financial operations are currently undergoing a ery of work and further safeguard the security of data. Fiscal year 1440/1441 AH (2019) Fiscal year 1439/1440 AH (2018) Fiscal year 1438/1439 AH (2017) digital transformation process that aims to speed up deliv- Item As of 30 Dec 2019 As of 30 Dec 2018 As of 30 Dec 2017 Unaudited (000s SAR) Audited (000s SAR) Audited (000s SAR)

Financial Indicators Revenue from main activities

Rental income 519,176 530,758 489,683 Revenue Water revenue 64,207 60,463 66,318

Total revenue over the fiscal year 1440/1441 AH (corre- of SAR766 million ($204.3 million), a 6 percent increase on sponding to 2019) increased due to several completed the previous fiscal year 1439/1440 AH (corresponding to Land allocation 33,937 40,239 51,049 infrastructure projects in industrial cities that have helped 2018), which recorded a total revenue of SAR720 million drive products and services. We achieved a total revenue ($192 million). Service fees 29,451 20,950 21,742

Other revenue streams

Investment revenue 78,341 30,537 20,052

Violations and fines 23,334 21,612 11,306

Other revenue 17,658 15,399 4,234

Total revenue 766,104 719,958 664,384 104 Annual Report 2019 105

Costs Financial position

The fiscal year 1440/1441 AH (corresponding to 2019) saw projects in the industrial cities are considered capital proj- total costs increase by 11 percent due in part to higher ects and contributed to overall costs. The total value of Modon assets increased over the last and infrastructure; this was a direct result of the estab- depreciation costs. Completed infrastructure development five years by 70 percent due to an increase in properties lishment and expansion of industrial cities nationwide.

Key costs for fiscal year 1440/1441 AH (2019) Financial position statement for fiscal years 1436/1437 AH (2015) - 1440/1441 AH (2019):

Fiscal year 1440/1441 Fiscal year 1439/1440 Fiscal year 1438/1439 Fiscal year 1437/1438 Fiscal year 1436/1437 Fiscal year 1440/1441 AH (2019) Fiscal year 1439/1440 AH (2018) Fiscal year 1438/1439 AH (2017) AH (2019) AH (2018) AH (2017) AH (2016) AH (2015) Item As of 30 Dec 2019 As of 30 Dec 2018 As of 30 Dec 2017 Item As of 30 Dec 2019 As of 30 Dec 2018 As of 30 Dec 2017 As of 30 Dec 2016 As of 30 Dec 2015 Unaudited (000s SAR) Audited (000s SAR) Audited (000s SAR) Unaudited (000s SAR) Audited (000s SAR) Audited (000s SAR) Audited (000s SAR) Audited (000s SAR)

Current assets Labor 175,581 153,258 126,797 3,498,340 2,627,493 1,523,922 1,127,111 2,166,330

Non-current assets 11,334,488 10,768,089 9,892,852 8,430,296 6,537,923 Operating expenses 170,812 169,042 185,292 Total assets 14,832,827 13,395,582 11,416,774 9,557,406 8,704,253 Depreciation 317,945 258,708 160,601 Current liabilities 707,125 862,066 1,019,793 1,015,568 880,995

General and administration 42,202 42,050 28,937 Non-current liabilities 30,906 44,485 60,377 57,525 55,229

Total liabilities 738,030 906,550 1,080,170 1,073,093 936,224 Expense reimbursements 6,403 22,732 8,765 Total assets 14,094,796 12,489,031 10,336,604 8,484,313 7,768,029 Marketing 17,912 13,998 22,101 Total liabilities and net assets 14,832,827 13,395,582 11,416,774 9,557,406 8,704,253 Total costs 730,855 659,788 532,493 106 Annual Report 2019 107

Internal Audit Audit Committee

Increasing the efficiency and effectiveness of internal function to help us improve our control systems. The Due to its firm commitment in promoting good corporate ing its responsibilities with regards to ensuring sound audit systems and ensuring integrity and transparency is a department operates in line with an approved audit plan governance, integrity and transparency, Modon’s Board accounting policies, accurate financial statements, effec- core commitment of Modon. To help achieve this goal, the based on facilitating effective risk assessment and covers of Directors formed a five-member Audit Committee tive risk management and robust internal controls. It also internal audit department works under the Audit Com- all Modon activities, operations and industrial cities. Its consisting of two board members and three independent supervises the work of the Internal Audit Department and mittee’s supervision and provides a high-level consultancy tasks include (but are not limited to) the following: members. The committee has the collective financial and submitted key recommendations to the Board of Directors administrative experience to support the board in meet- and Executive Management in 2019.

Facilitating internal audit control and risk management systems

Ensuring accuracy and integrity of financial and operational information

Promoting sound corporate governance and raising awareness about the importance of transparency and integrity

Evaluating remedial plans and measures developed by individual departments to implement audit report recommendations

Due to its firm commitment in ensuring the quality of our internal management and control systems. audit operations and implementing the International Internal Modon’s executive departments are committed to implementing Audit Standards, the Audit Committee commissioned an external key recommendations from the most recent internal audit. Fur- assessment of the Internal Audit Department. Key conclusions thermore, the Internal Audit Department is considered a leading from the assessors’ report stated that the department was entity within the government sector with regards to conducting adhering to International Internal Audit Standards while internal cybersecurity audits, which is why special focus is always given to auditors were compliant with the Code of Ethics issued by the such recommendations by our departments. Institute of Internal Auditors; embodying the key principles of Modon aims to always support the work of supervisory authorities internal auditing best practice as well as the Internal Audit Charter; and held a workshop on measures to prevent corruption in coop- adding value by helping Modon improve the efficiency and eration with the Control and Anti-Corruption Authority (Nazaha). effectiveness of its operations; and supporting efforts to achieve Post-workshop activity involved distributing leaflets on good cor-

Modon objectives by taking a systematic approach towards porate governance, risk management and internal control systems. Dammam Second Industrial City the evaluation and improvement of corporate governance, risk 108 Annual Report 2019 109

Modon is committed to achieving the highest quality and corporate excellence standards

Riyadh Second Industrial City 110 Annual Report 2019 111

Since its inception in 2001, the Saudi Author- Chapter Four ity for Industrial Cities and Technology Zones (Modon) has been committed to developing industrial land with integrated services. Today, 110 Industrial Cities, we oversee 35 industrial cities including those Services and Products currently operational and in development nationwide. We also oversee private industrial 112 Modon’s Services cities and complexes. In this chapter, we outline 114 Modon’s Products our services and products and development of 116 Industrial Cities operations over 2019. 222 Private Industrial Cities and Complexes: Building Today for a Bright Tomorrow 231 Technology Zones 112 Annual Report 2019 113

Modon’s Services

Modon is dedicated to providing high-quality services for investors, contractors and engineering offices, among other stakeholders. Key to Services offered when applying for achieving this is a commitment to ensuring clarity when issuing – for example – criteria, terms and conditions, documentation and delivery of Modon products work schedules to our industrial city partners. Over 2019, the turnaround time required to complete key routine tasks was significantly reduced in line with ongoing efforts to move to digital services platforms and Rental of land to establish increase the satisfaction rate of our partners in the private sector. industrial projects

Previous Current Industrial investor Contractor services Engineering office Partner care service turnaround time turnaround time Rental of land to establish services services investment projects • Qualifying Continuous working • Contract services • Qualifying 10 working days Allocation of products 60 days • Deed transfer contractors under engineering offices development of services consideration to under consideration services is core to Rental of land to establish • Coordination letters implement factory to oversee Modon’s commitment residential projects • Permit services projects or industrial engineering work to ensuring high- • Licensing services and investment conducted as part quality partner care. working working Issuance of permits contracts of investor contracts We continue to 7 days 3 days Rental of land to establish • Qualifying within the industrial facilitate effective logistical projects contractors/ cities communication suppliers before • Qualifying with local and global they can participate engineering offices investors and have in Modon tender expanded our network Amendment of partner working working Rental of purpose-built under consideration contracts 20 days 10 days processes of call centers that serve factories to oversee Modon • Permits for projects our partners. A unified communications • Issuance of number Facilitation of enquiries tower maintenance construction permits regarding renting land to • Licenses for • Approval of safety 920000425 Issuance of safety-related has been provided for working working establish industrial, investment, excavation/ plans operational licenses 20 days 7 days residential or logistical projects responding to queries connection of • Approval of while services architectural and Facilitation of enquiries • Facilitating billing construction plans regarding renting a purpose- 1920 for projects executed has been allocated to built factory Approval of plans working working in industrial cities receive reports 15 days 5 days 114 Annual Report 2019 115

Modon’s Products

Modon recognizes that it has a key role to play in contrib- diversify sources of income. To fulfilll this, we offer vital uting to the economy and supporting the government’s products in line with our role and responsibilities as a Logistical Solutions ongoing efforts to develop the investment sector and pillar of the industrial sector, as outlined below. Land has been allocated across the Kingdom’s main cities to establish logistical hubs. These zones have been de- signed for storage purposes and to host freight distribution centers.

Land and Industrial Loan Industrial Land Investors can apply for industrial land and financing in one integrated package through Modon’s Land and Industrial Industrial land zones across the Kingdom with complete infrastructure and services such as electricity and water Loan product. The result of a partnership between Modon and the Saudi Industrial Development Fund (SIDF), inves- have been developed to meet investors’ needs. tors benefit from a streamlined application process for both industrial land and loans. The aim is to save industrial in- vestors time and effort and help them easily navigate common challenges such as rental fees, allocation of industrial land and billing. Interested parties can visit www.landloan.gov.sa for more information.

Non-Industrial Land Factory and Loan In order to ensure an integrated industrial and investment environment that is attractive to potential investors and The integrated Factory and Loan product, also the result of a Modon-SIDF partnership, offers investors interested in stakeholders, land has been allocated in industrial cities for investment in non-industrial facilities and services. Such purpose-built factories access to an integrated financing package. Interested parties can visit www.landloan.gov.sa land has been used to set up banks, service facilities, shopping centers and residential complexes, for example. for further information.

Osos Purpose-Built Factories Financing is available for small enterprises in the industrial cities following a partnership between Modon and the Owners of small and medium enterprises have access to Modon’s purpose-built factories that range from 700 m² to Social Development Bank (SDB). Through the Osos product, financial and non-financial services are offered to such 1,500 m² in area. These factories feature fully-equipped production facilities, administrative offices, parking lots and ventures, with the goal of encouraging commercial projects from a variety of industries that demonstrate significant green spaces. They are targeted towards entrepreneurs working in light industries such as food, medical equipment, potential. It is hoped that these products and services will promote local output, empowerment of women-owned electrical appliances, electronics and 3D printing. enterprises and community enablement. Interested investors should visit https://len.scsb.gov.sa/Guest/Login.aspx?ReturnUrl=/Request/Login.aspx 116 Annual Report 2019 117

Industrial Cities

Modon is an independent authority that fully oversees the issued on 24/03/1439 AH (corresponding to December 15, establishment, management, operation, maintenance and 2017). In 2019, industrial cities were grouped into three development of industrial cities. It cooperates with the main sectors based on their geographical distribution as private sector in accordance with administrative resolu- part of a restructuring plan. tion number (1271/Q/M/A/1439 AH, corresponding to 2017)

Geographic distribution of industrial cities

Central Sector Riyadh First Industrial City, Riyadh Second Industrial City, Riyadh Third Indus- 12 cities trial City, Al-Kharj Industrial City, Sudair City for Industry and Businesses, Durma Industrial City, Qassim First Industrial City, Qassim Second Industri- HQ location al City, Modon Oasis in Qassim, Hail Industrial City, Al-Zulfi Industrial City, Riyadh Second Industrial City Shaqraa Industrial City

Eastern Sector Dammam First Industrial City, Dammam Second Industrial City, Dammam 10 cities Third Industrial City, Al-Ahsa First Industrial City, Al-Ahsa Second Industrial City, Modon Oasis in Al-Ahsa, Hafr Al-Batin Industrial City, Modon Oasis in HQ location Al-Jouf, Wa’ad Al-Shamal Industrial City, Ar’ar Industrial City Dammam Second Industrial City

Western Sector Makkah Al-Mukarrama Industrial City, Jeddah First Industrial City, Jeddah 13 cities Second Industrial City, Jeddah Third Industrial City, Modon Oasis in Jeddah, Rabigh Industrial City, Al-Madina Al-Munawwara Industrial City, Modon Oa- HQ location sis in Yanbu, Tabuk Industrial City, Asir Industrial City, Najran Industrial City Jeddah First Industrial City Jazan Industrial City, Al-Baha Industrial City 118 Annual Report 2019 119

Central Sector

The Central Sector consists of 12 key cities as follows:

• Riyadh First Industrial City • Riyadh Second Industrial City • Riyadh Third Industrial City • Al-Kharj Industrial City • Sudair City for Industry and Businesses • Durma Industrial City • Qassim First Industrial City • Qassim Second Industrial City • Modon Oasis in Qassim • Hail Industrial City • Al-Zulfi Industrial City • Shaqraa Industrial City.

Sectorial headquarters are based at Riyadh Second Industrial City.

Riyadh Second Industrial City 120 Annual Report 2019 121

Service contracts 7 Riyadh First Industrial City Other manufacturing industries 3

Printing 1 Establishment year: Water and electricity services 1973 Furniture 2

Electricity capacity Machinery and equipment not elsewhere classified 4 Provided by Saudi Electricity Company (SEC) Location: Computers, electronic and optical products Downtown Riyadh on the western side of Riyadh Dry Port, Water services capacity Al-Malaz District Still sourcing provider Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 1

Basic metals 1 Total area: 500,000 m2 Motor vehicles, trailers and semi-trailers 1

Electrical equipment 6

Developed area: Textiles 1 Fully developed Chemicals and chemical products 6

Current and targeted industries and targeted Current Paper and paper products 1 Distance to nearest airport: 36 km to King Khalid International Airport Rubber and plastic products 10

Other non-metallic mineral products 7

Distance to nearest railway station: Fabricated metal products (except machinery and equipment) 13 2 km to Riyadh railway station

New industrial projects Distance to nearest port: 2 km to Riyadh Dry Port Completion Rate Project Name Project Status 2018 2019 General safety measures for purpose-built factories - phase two 96 % 100 % Completed Number of contracts: 64 industrial and service contracts (including those in Establishment of fuel consumption testing laboratory operated by the - 73 % Under implementation operation and those under implementation) Saudi Standards, Metrology and Quality Organization (SASO) 122 Annual Report 2019 123

Riyadh Second Industrial City

Establishment year: Water and electricity services 1976

Electricity capacity Provided by Saudi Electricity Company (SEC) Location: Al-Kharj Road in south Riyadh, 10 km away from the inter- Water services capacity section with the Southern Ring Road 50٫000 m³

Wastewater treatment capacity Total area: 35٫000 m³ 19 million m2

Developed area: Fully developed

Distance to nearest airport: 52 km to King Khalid International Airport

Distance to nearest railway station: 24 km to Riyadh railway station

Distance to nearest port: 24 km to Riyadh Dry Port

Number of contracts: 1,119 industrial and service contracts (including those in

operation and those under implementation) Riyadh Second Industrial City Riyadh Second Industrial City 124 Annual Report 2019 125

Featured services

• General Directorate of Passports branch • Cristal Amaken Hotel (5-star) • Lam commercial complex • General Directorate of Civil Defense - firefighting unit Training centers • Saudi Post branch • Alkafaa Real Estate Company Hotel (3-star) • Zamil commercial complex • Riyadh Chamber of Commerce branch Training Center Area (m²) • Ministry of Human Resources and Social Development branch • United Fuel Company (ENOC) Higher Institute of Plastic Industries, supervised by the Technical and Vocational Training Corporation 60٫000 • Restaurants complex • Ministry of Commerce - Certificates of Origin Management Arkan Sports Center First Secondary Industrial Institute in Riyadh, supervised by the Technical and Vocational Training Corporation 60٫000 Ministry of Human Resources and Social Development branch - • • domestic workers affairs, at Lam commercial complex • Nursery (Diyar Atfal) Institute of Al-Abdullatif Industrial Investment Company (AIIC) 9٫600

Residential complexes Name Area No. of rooms Capacity

Al-Diyar Residential Complex 40٫000 m² 600 3٫800

Annan Residential Complex - Ishraqah I 16٫000 m² 500 2٫000

Annan Residential Complex - Ishraqah II 16٫000 m² 500 2٫000

Mask Residential Complex 30٫000 m² 1٫270 7٫500

Mask Residential Complex 10٫000 m² 450 1٫100

Tawq Residential Complex 16٫000 m² 663 2٫600

New industrial projects

Completion Rate Project Name Project Status 2018 2019 Construction of 16 purpose-built factories, each with an area of 1,500 m2 12 % 100 % Completed

Infrastructure rehabilitation for western residential area, covering the following: maintenance of existing roads and pavements, - New Under implementation installation of rainwater drainage, irrigation and lighting networks

Riyadh Second Industrial City 126 Annual Report 2019 127

Service contracts 174 Apparel 8

Other manufacturing industries 25 Leather and related products 5

Printing 20 Pharmaceuticals 19

Food products 115 Textiles 20

Furniture 33 Chemicals and chemical products 82

Machinery and equipment not elsewhere classified 50 Paper and paper products 27

Computers, electronic and optical products 11 Coke and refined petroleum products 2

Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 14 Rubber and plastic products 155

Basic metals Other non-metallic mineral products Current and targeted industries and targeted Current 15 industries and targeted Current 83

Motor vehicles, trailers and semi-trailers 4 Fabricated metal products (except machinery and equipment) 151

Beverages 18 Building materials, ceramics and glass 2

Electrical equipment 79 Paper, printing and publishing products 7 128 Annual Report 2019 129

Riyadh Third Industrial City

Service contracts 1 Establishment year: Water and electricity services 2010, as part of a partnership agreement between Modon Food products 5 and the General Directorate for Prisons Electricity capacity Electrical equipment 1 14 MVA Location: Pharmaceuticals 3 South Riyadh, adjacent to Al-Hayer Reformatory Water services capacity 3,000 m2 under implementation Chemicals and chemical products 2 industries Rubber and plastic products 2 Total area: 1 million m2 and targeted Current Fabricated metal products (except machinery and equipment) 1

Developed area: New industrial projects Fully developed Completion Rate Project Name Project Status 2018 2019 Distance to nearest airport: Design, execution and operation of potable water plants 95 % 100 % Completed 77 km to King Khalid International Airport General safety requirements for ready-built factories - phase two 96 % 100 % Completed

Distance to nearest railway station: 37 km to Riyadh railway station

Distance to nearest port: 37 km to Riyadh Dry Port

Number of contracts: 15 industrial and service contracts (including those in operation and those under implementation) 130 Annual Report 2019 131

Al-Kharj Industrial City

Establishment year: Water and electricity services 2009

Electricity capacity 1,000 MVA Location: Southwest of Al-Kharj, 15 km away from the intersection Water services capacity of Al-Dalam Road with the road to Al-Kharj Industrial City 6٫000 m³

Wastewater treatment capacity Total area: Project to design, execute and operate a 99 million m2 wastewater treatment plant with 10,000 m³ capacity under implementation

Developed area: Featured services 24 million m²

• Zad Al-Yamamah Commercial Center • Ibrahim Abdul Rahman Al-Sukhaibir Polyclinics Distance to nearest airport: 140 km to King Khalid International Airport

Al-Kharj Industrial City Distance to nearest railway station: 100 km to Riyadh railway station

New industrial projects Distance to nearest port: Completion Rate Project Name Project Status 100 km to Riyadh Dry Port 2018 2019

Development of phase two 87 % 100% Completed

Number of contracts: Wastewater treatment plant 98 % 100% Completed 375 industrial and service contracts (including those in Construction of 32 purpose-built factories, operation and those under implementation) - New Under implementation 12 with an area of 1,500 m2 and 20 with an area of 700 m2 132 Annual Report 2019 133

Service contracts 18 Electrical equipment 10

Other manufacturing industries 22 Apparel 3

Printing 1 Pharmaceuticals 12

Food products 54 Textiles 4

Furniture 8 Chemicals and chemical products 38

Machinery and equipment not elsewhere classified 13 Paper and paper products 10

Computers, electronic and optical products 1 Coke and refined petroleum products 12

Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 9 Rubber and plastic products 52

Current and targeted industries and targeted Current Basic metals 7 dna tnerruC seirtsudni detegrat Other non-metallic mineral products 31

Motor vehicles, trailers and semi-trailers 4 Fabricated metal products (except machinery and equipment) 47

Beverages 9 Building materials, ceramics and glass 10 134 Annual Report 2019 135

Durma Industrial City

Other manufacturing industries 1 Establishment year: Water and electricity services 2003 Machinery and equipment not elsewhere classified 1

Electricity capacity Chemicals and chemical products 2 15 MVA Location: Coke and refined petroleum products 3 West of Riyadh, 7 km northwest of Durma Water services capacity 2,500 m3 capacity under implementation industries Other non-metallic mineral products 7

Building materials, ceramics and glass 2 Total area: and targeted Current 11.5 million m2

New industrial projects Developed area: 2 Completion Rate 3.85 million m Project Name Project Status 2018 2019 Design, execution and operation of potable water plants 50 % 100 % Completed

Distance to nearest airport: Execution of air distribution network with voltage of 33 kV - 100 % Completed 100 km to King Khalid International Airport

Distance to nearest railway station: 100 km to Riyadh railway station

Distance to nearest port: 100 km to Riyadh Dry Port

Number of contracts: 16 industrial and service contracts (including those in operation and those under implementation) 136 Annual Report 2019 137

Sudair City for Industry and Businesses

Establishment year: Water and electricity services 2009

Electricity capacity 254 MVA Location: 150 km away from Riyadh, west of the Riyadh-Qassim Water services capacity Road extension. 6,000 m³

Wastewater treatment capacity Total area: 10,000 m³ 265 million m2

Featured services Developed area: 16.9 million m2 • Majma’ah Chamber of Commerce branch • Al-Himmah Residential Complex with 1,295 rooms and capacity for 6,000 workers Distance to nearest airport: 140 km to King Khalid International Airport “Yesterday, this Distance to nearest railway station: 60 km to Majma’ah railway station site was a desert for hunting; today, Distance to nearest port: 160 km to Riyadh Dry Port it is an industrial city serving the

Number of contracts: country.” 293 industrial and service contracts (including those in Custodian of the Two Holy Mosques operation and those under implementation) King Salman bin Abdulaziz Al-Saud Sudair City for Industry and Businesses 138 Annual Report 2019 139

Service contracts 21 Pharmaceuticals 26

Other manufacturing industries 7 Chemicals and chemical products 18

Printing 2 Paper and paper products 11

Food products 23 Coke and refined petroleum products 3

Furniture 10 Rubber and plastic products 36

Machinery and equipment not elsewhere classified 12 Other non-metallic mineral products 35

Computers, electronic and optical products 1 Fabricated metal products (except machinery and equipment) 43 Current and targeted industries and targeted Current Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 6 Building materials, ceramics and glass 9

Current and targeted industries and targeted Current Basic metals 2

Beverages 13

Electrical equipment 15 New industrial projects Completion Rate Project Name Project Status 2018 2019 Design, execution and operation of wastewater treatment plant 98 % 100 % Completed

Construction of 20 purpose-built factories, each with an area of 1,500 m2 22 % 100 % Completed 140 Annual Report 2019 141

Featured services Qassim First Industrial City

• General Directorate of Civil Defense - firefighting unit • Saudi Post branch Establishment year: Water and electricity services • Health center affiliated to the Ministry of Health 1980 • General Directorate of Civil Defense branch • Hazardous Materials Rapid Intervention Unit Electricity capacity Provided by Saudi Electricity Company (SEC) Service contracts 29 Location: South of Buraidah, east of King Abdulaziz Road and 1 km Water services capacity Food products 20 away from the intersection of the Riyadh-Qassim High- 4,000 m³ way with King Abdulaziz Road Furniture 6 Wastewater treatment capacity Total area: 7,000 m³ Machinery and equipment not elsewhere classified 3 1.5 million m2 Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 2

Basic metals 1 Developed area: Fully developed Beverages 1

Electrical equipment 9

Distance to nearest airport: Pharmaceuticals 1 49 km to Prince Nayef bin Abdulaziz International Airport Textiles 2

Chemicals and chemical products 6 Distance to nearest railway station: 50 km to Qassim railway station Paper and paper products 8

Coke and refined petroleum products 1 Current and targeted industries and targeted Current

Distance to nearest port: Rubber and plastic products 24 355 km to Riyadh Dry Port Other non-metallic mineral products 14

Fabricated metal products (except machinery and equipment) 13 Number of contracts: 142 industrial and service contracts (including those in Paper, printing and publishing products 2 operation and those under implementation) Qassim First Industrial City 142 Annual Report 2019 143

Other manufacturing industries 3 Qassim Second Industrial City Food products 4

Basic metals 1 Establishment year: Water and electricity services 2012 Beverages 1

Electricity capacity Chemicals and chemical products 1 334 MVA Location: Paper and paper products 4 Southeast of Buraidah, 5 km before the intersection of the Water services capacity Eastern Ring Road with Riyadh-Qassim Highway 1,000 m³ Coke and refined petroleum products 1

Rubber and plastic products 8 Total area: 11.8 million m² Other non-metallic mineral products 2

Fabricated metal products (except machinery and equipment)

Current and targeted industries and targeted Current 4

Developed area: Building materials, ceramics and glass 2 2 million m²

Distance to nearest airport: 60 km to Prince Nayef bin Abdulaziz International Airport

Distance to nearest railway station: 60 km to Qassim railway station

New industrial projects Distance to nearest port: Completion Rate 350 km to Riyadh Dry Port Project Name Project Status 2018 2019 Execution of power distribution network with voltage of 13.8 kV - 100 % Completed

Number of contracts: Completion of infrastructure work, 31 industrial and service contracts (including those in including construction of potable water, rainwater drainage, - New Under implementation operation and those under implementation) wastewater, communications and lighting networks 144 Annual Report 2019 145

Modon Oasis in Qassim

Establishment year: Water and electricity services 2012, but currently under implementation Current and targeted industries

Electricity capacity Saudi Electricity Company (SEC) to Location: implement connection South of Buraidah, on the intersection of King Abdulaziz Road with Imam Muhammad Bin Saud Road, 3 km north Water services capacity of Qassim First Industrial City Under implementation, to be connected to the public network Total area: 11.8 million m²

Jewelry and accessories Cosmetics Developed area: 2 million m²

Distance to nearest airport: Fashion and textiles Food and dates 60 km to Prince Nayef bin Abdulaziz International Airport

Distance to nearest railway station: New industrial projects 60 km to Qassim railway station Completion Rate Project Name Project Status 2018 2019 Development of infrastructure, Distance to nearest port: including construction of road, potable water, rainwater drainage, waste- 20 % 67 % Under implementation 350 km to Riyadh Dry Port water, irrigation, communications, electricity and road lighting networks

Construction of 20 purpose-built factories, each with an area of - 5 % Under implementation 700 m2 Number of contracts: 31 industrial and service contracts (including those in Construction of gates and fencing - New Under implementation operation and those under implementation) 146 Annual Report 2019 147

Service contracts 11 Hail Industrial City Other manufacturing industries 3

Printing 1 Establishment year: Water and electricity services 2003 Food products 16

Electricity capacity Furniture 2 134 MVA Location: Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 2 West of Hail, 5 km east of the King Abdulaziz Road inter- Water services capacity section with King Abdullah Road 7,000 m³ under implementation Basic metals 2

Beverages 7 Total area: 3.8 million m² Electrical equipment 2

Pharmaceuticals 2

Developed area: Chemicals and chemical products 11 3 million m² Paper and paper products 3

Current and targeted industries and targeted Current Rubber and plastic products 15 Distance to nearest airport: 17 km to Hail International Airport Other non-metallic mineral products 9

Fabricated metal products (except machinery and equipment) 5

Distance to nearest railway station: Building materials, ceramics and glass 4 70 km to Hail railway station Paper, printing and publishing products 1

Distance to nearest port: New industrial projects 620 km to Riyadh Dry Port Completion Rate Project Name Project Status 2018 2019

Number of contracts: Design, execution and operation of potable water plants 47 % 100 % Completed 96 industrial and service contracts (including those in Completion of infrastructure services, including construction of potable water, rainwater drainage, 98 % 99 % Under implementation operation and those under implementation) Hail Industrial City wastewater, electricity and road lighting networks; and maintenance of existing main roads Construction of 24 purpose-built factories, each with an area of 1,500 m2 - New Under implementation 148 Annual Report 2019 149

Al-Zulfi Industrial City

- Beverages 1 Establishment year: Water and electricity services 2010 Coke and refined petroleum products 4

Electricity capacity Rubber and plastic products 1 15 MVA Location: Other non-metallic mineral products 1 Southeast of Al-Zulfi, on the intersection of the Eastern Water services capacity

Ring Road extension with the Southern Ring Road, 6 km 1,000 m³ and tar Current Fabricated metal products (except machinery and equipment) geted industries geted 1 away from Al-Zulfi Housing Project

Total area: 18 million m² New industrial projects Completion Rate Project Name Project Status 2018 2019 Developed area: Execution of air distribution network with voltage of 33 kV - 100 % Completed 1 million m²

Distance to nearest airport: 150 km to Prince Nayef bin Abdulaziz International Airport

Distance to nearest railway station: 74 km to Qassim railway station

Distance to nearest port: 300 km to Riyadh Dry Port

Number of contracts: 8 industrial and service contracts (including those in oper- ation and those under implementation) 150 Annual Report 2019 151

Other manufacturing industries 3 Shaqraa Industrial City Food products 3

Machinery and equipment not elsewhere classified 1 Establishment year: Water and electricity services 2011 Beverages 3

Electricity capacity Electrical equipment 1 15 MVA Location: Chemicals and chemical products 2 Southwest of Shaqra, 12 km south of Shaqra University Water services capacity 1,000 m³ Coke and refined petroleum products 9

Rubber and plastic products 2 Total area: 10 million m² Fabricated metal products (except machinery and equipment) 1

Current and targeted industries and targeted Current Building materials, ceramics and glass 2

Developed area: 1 million m²

Distance to nearest airport: 210 km to King Khalid International Airport

Distance to nearest railway station: 200 km to Riyadh railway station

New industrial projects Distance to nearest port: Completion Rate 200 km to Riyadh Dry Port Project Name Project Status 2018 2019

Completion of roadworks - 31 % Under implementation Number of contracts: 27 industrial and service contracts (including those in Execution of medium voltage network with voltage of 13.8 kV - 88 % Under implementation operation and those under implementation) 152 Annual Report 2019 153

Western Sector

The Western Sector consists of 13 key cities as follows:

• Makkah Al-Mukarrama Industrial City • Jeddah First Industrial City • Jeddah Second Industrial City • Jeddah Third Industrial City • Modon Oasis in Jeddah • Rabigh Industrial City • Al-Madina Al-Munawwara Industrial City • Modon Oasis in Yanbu • Tabuk Industrial City • Asir Industrial City • Najran Industrial City • Jazan Industrial City • Al-Baha Industrial City.

Sectorial headquarters are based at Jeddah First Industrial City.

Jeddah First Industrial City 154 Annual Report 2019 155

Service contracts 14 Makkah Al-Mukarrama Industrial City Other manufacturing industries 2

Food products 15 Establishment year: Water and electricity services 1985 Furniture 1

Electricity capacity Machinery and equipment not elsewhere classified 2 Provided by Saudi Electricity Company (SEC) Location: Computers, electronic and optical products 1 North of Makkah Al-Mukarrama on Al-Madinah Road, Water services capacity opposite the Makkah College of Technology Under implementation, to be Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 2 connected to the public network Basic metals 1 Total area: Featured services 730,000 m² Beverages 7 • Ministry of Human Resources and Social Development branch Electrical equipment 1 • Saudi Post branch Developed area: • Saudi Telecom Company branch Pharmaceuticals 2 Fully developed • Al-Fursan Club (Mohammed Ahmed Suleiman Al-Hazmi Establishment) Textiles 1 • The Cooperative Office for Propagation and Guidance • Hira General Hospital Chemicals and chemical products 7 Distance to nearest airport: • Makkah Chamber of Commerce branch Current and targeted industries and targeted Current 100 km to King Abdulaziz International Airport • Riyad Bank Paper and paper products 3 • Al-Baik branch (Aquat Food Industries Company LLC) • Fitness Time branch (Leejam Sports Company) Rubber and plastic products 6 • Arabian Safety & Industrial Security Center (ARSISC) Distance to nearest railway station: • Rakaez Medical Establishment Other non-metallic mineral products 2 12 km to Makkah Haramain High-Speed Railway Station Fabricated metal products (except machinery and equipment) 6

Building materials, ceramics and glass 1 Distance to nearest port: 84 km to Jeddah Islamic Port New industrial projects Completion Rate Project Name Project Status Number of contracts: 2018 2019 74 industrial and service contracts (including those in Construction of 17 purpose-built factories, each with an area of 1,500 m2 98 % 100 % Completed operation and those under implementation) Makkah Al-Mukarrama Industrial City - Al-Baik Factory General safety measures for purpose-built factories – phase three 1 % 100 % Completed 156 Annual Report 2019 157

Jeddah First Industrial City

Establishment year: Water and electricity services 1971

Electricity capacity Provided by Saudi Electricity Company (SEC) Location: South of Jeddah, east of Al-Rahmaniyah Market Water services capacity 20,000 m³

Wastewater treatment capacity Total area: 25,000 m³ 12 million m²

Developed area: Featured services Fully developed

• Ministry of Energy, Industry and Mineral Resourc- es branch in the administrative building Distance to nearest airport: • Riyad Bank, NCB and Al-Rajhi Bank branches Jeddah First Industrial City 45 km to King Abdulaziz International Airport • Two Civil Defense centers • Jeddah Chamber of Commerce branch • Logistics area with truck depot Training centers • SABIC central warehouse Distance to nearest railway station: Training Center Area (m²) 953 km to Riyadh railway station Higher institute of the Arab Fire Safety & Security Academy 10٫352

Higher Institute of the Arab Fire Safety & Security Academy 1٫198

1٫600 Distance to nearest port: Higher Institute of Applied Printing Training 13 km to Jeddah Islamic Port New industrial projects Completion Rate Project Name Project Status Number of contracts: 2018 2019 1,059 industrial and service contracts (including those in operation and those under implementation) Construction of 16 self-storage facilities - New Under implementation 158 Annual Report 2019 159

Service contracts 181 Leather and related products 2

Other manufacturing industries 32 Pharmaceuticals 18

Printing 5 Textiles 32

Food products 165 Chemicals and chemical products 74

Furniture 11 Paper and paper products 38

Machinery and equipment not elsewhere classified 27 Coke and refined petroleum products 9

Computers, electronic and optical products 8 Other transport equipment 1

Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 12 Rubber and plastic products 172

Basic metals 17 Other non-metallic mineral products 37

Current and targeted industries and targeted Current Motor vehicles, trailers and semi-trailers 6 industries and targeted Current Fabricated metal products (except machinery and equipment) 142

Beverages 25 Building materials, ceramics and glass 2

Electrical equipment 38 Paper, printing and publishing products 1

Apparel 4 160 Annual Report 2019 161

Jeddah Second Industrial City

Establishment year: Water and electricity services 2009

Electricity capacity 468 MVA Location: West of the Coast Road south of Jeddah near the Red Sea, Water services capacity 30 km away from Jeddah First Industrial City 10,000 m³

Wastewater treatment capacity Total area: Project to design, execute and operate a 8 million m² wastewater treatment plant with 10,000 m³ capacity under implementation

Developed area: Featured services Fully developed

• Khalid Rashid Al-Radadi General Medical Com- plex Distance to nearest airport: • Naqel Company Jeddah Second Industrial City 77 km to King Abdulaziz International Airport • KGL Logistics Company

Residential complexes Distance to nearest railway station: Name Area No. of rooms Capacity 954 km to Riyadh railway station Al-Musanadah Residential Complex 73٫000 m² 2٫248 12٫536

Anan Residential Complex 21٫500 m² 627 2٫508

Distance to nearest port: Al-Qadi Residential Complex 20٫000 m² 700 3٫500 64 km to Jeddah Islamic Port New industrial projects Completion Rate Project Name Project Status Number of contracts: 2018 2019 275 industrial and service contracts (including those in Implementation of temporary measures to minimize rainwater flood- operation and those under implementation) - 100 % Completed ing risks 162 Annual Report 2019 163

Service contracts 17 Electrical equipment 5

Other manufacturing industries 8 Leather and related products 1

Printing 1 Pharmaceuticals 9

Food products 52 Textiles 5

Furniture 6 Chemicals and chemical products 39

Machinery and equipment not elsewhere classified 4 Paper and paper products 6

Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 3 Rubber and plastic products 57

Basic metals 8 Other non-metallic mineral products 7 Current and targeted industries and targeted Current industries and targeted Current Motor vehicles, trailers and semi-trailers 1 Fabricated metal products (except machinery and equipment) 35

Beverages 10 Building materials, ceramics and glass 1 164 Annual Report 2019 165

Jeddah Third Industrial City

New industrial projects Establishment year: Water and electricity services 2012 Completion Rate Project Name Project Status Electricity capacity 2018 2019 1,000 MVA Development of intersections for industrial city road link 84 % 100 % Completed Location: East of the Coast Road that lies south of Jeddah near the Water services capacity Development of phases one and two of industrial city extension, including construction of road, potable water, rainwater drain- Red Sea, 30 km away from Jeddah First Industrial City 10,000 m³ - 92 % Under implementation age, wastewater, irrigation, communications, electricity and road lighting networks Total area: 80 million m²

Developed area: Featured services 24 million m²

• Hala supply chain services

Distance to nearest airport: 77 km to King Abdulaziz International Airport

Distance to nearest railway station: 954 km to Riyadh railway station

Distance to nearest port: 62 km to Jeddah Islamic Port

Number of contracts: 539 industrial and service contracts (including those in operation and those under implementation 166 Annual Report 2019 167

Service contracts 13 Apparel 8

Other manufacturing industries 29 Pharmaceuticals 6

Printing 6 Textiles 3

Food products 71 Chemicals and chemical products 58

Furniture 11 Paper and paper products 27

Machinery and equipment not elsewhere classified 21 Coke and refined petroleum products 10

Computers, electronic and optical products 1 Other transport equipment 1

Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 7 Rubber and plastic products 87

Basic metals 11 Other non-metallic mineral products 26

Current and targeted industries and targeted Current Motor vehicles, trailers and semi-trailers 4 industries and targeted Current Fabricated metal products (except machinery and equipment) 85

Beverages 32 Building materials, ceramics and glass 3

Electrical equipment 16 Paper, printing and publishing products 3 168 Annual Report 2019 169

Modon Oasis in Jeddah Rabigh Industrial City

Establishment year: Water and electricity services Establishment year: Water and electricity services 2015 2015 Electricity capacity Electricity capacity Connection to be provided by Saudi Connection to be provided by Saudi Electricity Company (SEC) Electricity Company (SEC) Location: Location: Northeast of Jeddah on Asfan Road, 3 km east of Jeddah Water services capacity South of Rabigh on the Jeddah-Rabigh Road, east of the Water services capacity University Under implementation Haramain High-Speed Railway Maintenance Station and 7 Under implementation km east of King Abdullah Economic City

Total area: Total area: 5 million m² 75.5 million m² Current and targeted industries

Developed area: Developed area: 2.5 million m² 2 million m²

Distance to nearest airport: Food High-tech industries Distance to nearest airport: 40 km to King Abdulaziz International Airport 100 km to King Abdulaziz International Airport

Distance to nearest railway station: Medical supplies Rubber Distance to nearest railway station: 964 km to Riyadh railway station 14 km to Rabigh Haramain High-Speed Railway Station

Distance to New industrial projects nearest port: Distance to nearest port: Completion Rate 66 km to Project Name Project Status 139 km to Jeddah Islamic Port Jeddah Islamic 2018 2019 Port Construction of building for lease 73 % 91 % Under implementation Infrastructure project - packages A, B, C and D 2 % 57 % Under implementation Construction of 44 purpose-built factories, each with an area of 700 m2 15 % 100 % Completed Construction of 110 kV electrical substation - 28 % Under implementation Development of infrastructure for commercial area - New Under implementation 170 Annual Report 2019 171

Al-Madina Al-Munawwara Industrial City

Establishment year: Water and electricity services 2003

Electricity capacity 1,000 MVA Location: Southwest of Al-Madina, south of the Reception Station Water services capacity for Sea and Air Pilgrims 5٫000 m³

Wastewater treatment capacity Total area: Phase one of project to design, execute and 17 million m2 operate a wastewater treatment plant with 5,000 m³ capacity under implementation

Developed area: Featured services 10 million m²

• Waha Al-Shifaa Medical Polyclinic • Shopping center Distance to nearest airport: 50 km to Prince Mohammed Bin Abdulaziz International Airport

Distance to nearest railway station: Al-Madina Al-Munawwara Industrial City 34 km to Al-Madina Haramain High-Speed Railway Station

New industrial projects Distance to nearest port: Completion Rate 200 km to King Fahd Industrial Port in Yanbu Project Name Project Status 2018 2019

Design, execution and operation of industrial waste and wastewater treatment plant 100 % 82 % Completed Number of contracts: Execution of roads and infrastructure services for purpose-built factories zone - 9 % Under implementation 243 industrial and service contracts including contracts in operation and under construction Construction of 16 purpose-built factories, each with an area of 700 m2 - 7 % Under implementation 172 Annual Report 2019 173

Service contracts 24 Apparel 5

Other manufacturing industries 8 Leather and related products 1

Printing 1 Pharmaceuticals 4

Food products 40 Textiles 3

Furniture 5 Chemicals and chemical products 12

Machinery and equipment not elsewhere classified 2 Paper and paper products 8

Computers, electronic and optical products 1 Coke and refined petroleum products 2

Basic metals 5 Rubber and plastic products 30

Motor vehicles, trailers and semi-trailers 1 Other non-metallic mineral products 27

Current and targeted industries and targeted Current Beverages 25 industries and targeted Current Fabricated metal products (except machinery and equipment) 25

Electrical equipment 9 Building materials, ceramics and glass 5 174 Annual Report 2019 175

Modon Oasis in Yanbu

Establishment year: Water and electricity services Current and targeted industries 2014

Electricity capacity Saudi Electricity Company (SEC) to Location: implement connection North of Yanbu city center and Prince Abdulmohsin bin Abdulaziz Airport Water services capacity Under implementation, to be connected to the public network Total area: 500,000 m2

Jewelry and accessories Cosmetics

Developed area: Fully developed

Fashion and textiles Handicrafts Distance to nearest airport: 3 km to Prince Abdulmohsin Bin Abdulaziz Domestic Airport New industrial projects Distance to nearest railway station: Completion Rate 222 km to Al-Madina Haramain High-Speed Railway Project Name Project Status Station 2018 2019 Development of Modon Oasis 93 % 100 % Completed

Distance to nearest port: Execution of potable water pipeline supplying the oasis - New Under implementation 19 km to Yanbu Commercial Port Construction of potable water and irrigation tanks - New Under implementation

Construction of gates and fences - New Under implementation

Development of commercial area infrastructure - New Under implementation

Construction of 20 purpose-built factories, each with an area of 700 m2 - New Under implementation 176 Annual Report 2019 177

Service contracts 8 Tabuk Industrial City Other manufacturing industries 7

Food products 6 Establishment year: Water and electricity services 2003 Furniture 1

Electricity capacity Machinery and equipment not elsewhere classified 2 15 MVA Location: Beverages 4 Northeast of Tabuk city, 120 km away from Halat Ammar Water services capacity Port 3,000 m³ Electrical equipment 2

Pharmaceuticals 2 Total area: 4 million m² Chemicals and chemical products 6

Paper and paper products 3

Developed area: Coke and refined petroleum products 1 2.9 million m² Rubber and plastic products 4 Current and targeted industries and targeted Current Other non-metallic mineral products 22 Distance to nearest airport: 22 km to Prince Sultan Bin Abdulaziz Airport Fabricated metal products (except machinery and equipment) 4

Building materials, ceramics and glass 1

Distance to nearest railway station: 425 km to Al-Jouf Railway Station

Distance to nearest port: 244 km to Duba Port

Number of contracts: 73 industrial and service contracts (including those in operation and those under implementation) 178 Annual Report 2019 179

Service contracts 6 Asir Industrial City Other manufacturing industries 4

Printing 3 Establishment year: Water and electricity services 1990 Food products 17

Electricity capacity Furniture 6 Location: Source supplied by Modon Northwest of Khamis Mushait on Al-Madinah Al- Machinery and equipment not elsewhere classified 3 Munawarah Road, 3 km south of the National Gas and Water services capacity Industrialization Company (GASCO) Under implementation, to be Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 1 connected to the public network Motor vehicles, trailers and semi-trailers 1 Total area: 2.7 million m2 Featured services Beverages 1

• Al-Jazeera Paints Institute for Training Electrical equipment 5

Developed area: Apparel 1 Fully developed Pharmaceuticals 2

Textiles 1 Distance to nearest airport: 23 km to Abha International Airport Chemicals and chemical products 40

Current and targeted industries and targeted Current Paper and paper products 5

Distance to nearest railway station: Coke and refined petroleum products 1 954 km to Al-Kharj railway station Rubber and plastic products 20

Other non-metallic mineral products 21 Distance to nearest port: 230 km to Jazan Port Fabricated metal products (except machinery and equipment) 17

Building materials, ceramics and glass 2

Number of contracts: 157 industrial and service contracts (including those in

operation and those under implementation) Asir Industrial City 180 Annual Report 2019 181

Service contracts 1 Najran Industrial City Food products 2

Furniture 1 Establishment year: Water and electricity services 2003 Beverages 1

Electricity capacity Pharmaceuticals 2 17 MVA Location: Chemicals and chemical products 2 Northeast of Najran, 45 km away from downtown Najran Water services capacity and west of Al-Husainiyah village Under implementation, to be Rubber and plastic products 4 connected to the public network Other non-metallic mineral products 14 Total area: 6.5 million m² Fabricated metal products (except machinery and equipment) 1

Current and targeted industries and targeted Current Building materials, ceramics and glass 2

Developed area: 3.6 million m²

Distance to nearest airport: 35 km to Najran Airport

Distance to nearest railway station: 840 km to Al-Kharj railway station

Distance to nearest port: 400 km to Jazan Port

Number of contracts: 30 industrial and service contracts (including those in operation and those under implementation) 182 Annual Report 2019 183

Service contracts 5 Jazan Industrial City Other manufacturing industries 2

Food products 10 Establishment year: Water and electricity services 2009 Furniture 1

Electricity capacity Machinery and equipment not elsewhere classified 1 134 MVA Location: Beverages 3 East of Jazan city and Abu Noura village Water services capacity 5,000 m³ currently under Electrical equipment 1 implementation Apparel 1 Total area: 39 million m² Pharmaceuticals 1

Chemicals and chemical products 6

Developed area: Paper and paper products 3 2.9 million m² Coke and refined petroleum products 2 Current and targeted industries and targeted Current Rubber and plastic products 6 Distance to nearest airport: 52 km to King Abdullah bin Abdulaziz Domestic Airport Other non-metallic mineral products 6

Fabricated metal products (except machinery and equipment) 3

Distance to nearest railway station: Building materials, ceramics and glass 2 712 km to Jeddah Haramain High-Speed Railway Station

New industrial projects

Distance to nearest port: Completion Rate Project Name Project Status 60 km to Jazan Port 2018 2019 Development of phase two, including construction of road, potable water, rain- 69 % 100 % Completed water drainage, wastewater, irrigation, communications and electricity networks

Number of contracts: Design, execution and operation of potable water tanks 76 % 100 % Completed 53 industrial and service contracts (including those in 2 operation and those under implementation) Construction of 8 purpose-built factories, each with an area of 1,500 m - 6 % Under implementation

Construction of purpose-built factory with an area of 5,000 m2 - New Under implementation 184 Annual Report 2019 185

Al-Baha Industrial City

Service contracts 2 Establishment year: Water and electricity services 2012 Food products 1

Electricity capacity Furniture 2 20 MVA Location: Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 1 North of Al-Aqiq Water services capacity 3,000 m³ currently under Beverages 2 implementation Pharmaceuticals 1 Total area: 3 million m² Chemicals and chemical products 2

Rubber and plastic products 3

Developed area: Other non-metallic mineral products 5 1.3 million m² Current and targeted industries and targeted Current Building materials, ceramics and glass 1

Distance to nearest airport: 23 km to King Saud bin Abdulaziz Airport New industrial projects Completion Rate Project Name Project Status Distance to nearest railway station: 2018 2019 309 km to Makkah Haramain High-Speed Railway Station Design, execution and operation of potable water tanks 61 % 100 % Completed

Distance to nearest port: 380 km to Jeddah Islamic Port

Number of contracts: 53 industrial and service contracts (including those in operation and those under implementation) 186 Annual Report 2019 187

Eastern Sector

The Eastern Sector consists of 10 key cities as follows:

• Dammam First Industrial City • Dammam Second Industrial City • Dammam Third Industrial City • Al-Ahsa First Industrial City • Al-Ahsa Second Industrial City • Modon Oasis in Al-Ahsa • Hafr Al-Batin Industrial City • Modon Oasis in Al-Jouf • Wa’ad Al-Shamal Industrial City • Ar’ar Industrial City

Sectorial headquarters are based at Dammam Second Industrial City.

Dammam First Industrial City 188 Annual Report 2019 189

Dammam First Industrial City

Featured services Establishment year: Water and electricity services 1973 • Prince Sultan Fund for Women Development Electricity capacity branch (first business incubator in Modon) Provided by Saudi Electricity Company (SEC) • Car maintenance service center Location: • Al-Farabi Medical Complex Southeast of Dammam near the coast of the Arabian Gulf, Water services capacity • Dammam Chamber of Commerce branch at the intersection of King Abdulaziz Road with King Fahd 3,400 m³ • Saudi Cancer Society branch Road. • Saudi Post branch Wastewater treatment capacity • Industrialists’ service center Total area: Project to design, execute and operate a • Civil Defense center 2.4 million m² wastewater treatment plant with 5,000 m³ capacity under implementation

Developed area: Fully developed

Distance to nearest airport: Training centers 44 km to King Fahd International Airport Training Center Area (m²)

Fava Training Center 2٫048

Distance to nearest railway station: Fava Training Center 2٫973 5 km to Dammam Railway Station Raja Abdullah Al-Haraz Training Establishment 1٫452

Zamil Higher Institute for Industrial Training 3٫112

Distance to nearest port: Zamil Higher Institute for Industrial Training 3٫391 12 km to King Abdulaziz Port New industrial projects Completion Rate Project Name Project Status Number of contracts: 2018 2019 170 industrial and service contracts (including those in operation and those under implementation) Construction of flood control channel and flood barrier - 39 % Under implementation 190 Annual Report 2019 191

Service contracts 31 Beverages 2 Other manufacturing industries 7 Electrical equipment 11 Printing 6 Pharmaceuticals 3 Food products 9 Chemicals and chemical products 13 Furniture 2 Paper and paper products 4 Machinery and equipment not elsewhere classified 12 Rubber and plastic products 17 Computers, electronic and optical products 1 Other non-metallic mineral products 8

Wood and products of wood and cork (except furniture); articles of straw and plaiting materials Fabricated metal products (except machinery and equipment) Current and targeted industries and targeted Current 1 industries and targeted Current 39 Motor vehicles, trailers and semi-trailers 1 Paper, printing and publishing products 3 192 Annual Report 2019 193

Dammam Second Industrial City

Establishment year: Water and electricity services 1978

Electricity capacity 134 MVA Location: West of Dhahran on the Dhahran-Abqaiq Road, east of Water services capacity King Fahd Military City 27,000 m³

Wastewater treatment capacity Total area: 40,000 m³ 25 million m²

Dammam Second Industrial City

Developed area: Featured services Training centers Fully developed Training Center Area (m²) • Al-Mani Medical Clinic Al-Himmah Residential Complex with 794 rooms General Technical & Safety Training Center (GTSC) 7٫500 • Distance to nearest airport: and capacity for up to 3,800 workers Technical Training Institute for Non-Destructive Testing 5٫000 55 km to King Fahd International Airport • Money transfer center Dammam Chamber of Commerce branch Fire Direction Center Co. Ltd. 7٫698 • • Fuel station • Shopping centers and restaurants New industrial projects Distance to nearest railway station: • Civil Defense center 32 km to Dammam Railway Station • Car service and maintenance center Completion Rate Project Name Project Status • Ministry of Human Resources and Social Devel- 2018 2019 opment office • Banks Completion of roadworks 85 % 86 % Under implementation Distance to nearest port: • Hotel Construction of 15 purpose-built factories, each with an area of 40 km to King Abdulaziz Port 58 % 100 % Completed 1,500 m2 Connecting services to 84 purpose-built factories under con- - 4 % Under implementation struction Construction of 32 purpose-built factories each with an area of Number of contracts: - New Under implementation 1,500 m2 and 52 factories each with an area of 700 m2 1,056 industrial and service contracts (including those in Construction of 86 new facilities (factories, warehouses, sup- operation and those under implementation) - New Under implementation porting services) 194 Annual Report 2019 195

Service contracts 2,018 Leather and related products 1

Other manufacturing industries 28 Pharmaceuticals 7

Printing 5 Textiles 14

Food products 50 Chemicals and chemical products 125

Furniture 11 Paper and paper products 21

Machinery and equipment not elsewhere classified 66 Coke and refined petroleum products 5

Computers, electronic and optical products 5 Other transport equipment 3

Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 23 Rubber and plastic products 122

Basic metals 27 Other non-metallic mineral products 70

Current and targeted industries and targeted Current Motor vehicles, trailers and semi-trailers 5 industries and targeted Current Fabricated metal products (except machinery and equipment) 176

Beverages 18 Building materials, ceramics and glass 5

Electrical equipment 55 Paper, printing and publishing products 2

Apparel 4 196 Annual Report 2019 197

Dammam Third Industrial City

Establishment year: Water and electricity services 2012

Electricity capacity 500 MVA Location: South of Dhahran, on the Eastern Coastal Road leading to Water services capacity Salwa and 5 km south of Half Moon Bay 6,000 m³

Wastewater treatment capacity Total area: Phase one of project to design, execute and 48 million m² operate a wastewater treatment plant with 10,000 m³ capacity under implementation

Developed area: 10 million m²

Distance to nearest airport: 91 km to King Fahd International Airport

Distance to nearest railway station: Dammam Third Industrial City 70 km to Dammam Railway Station

New industrial projects

Distance to nearest port: Completion Rate Project Name Project Status 80 km to King Abdulaziz Port 2018 2019

Development of phase one, including construction of road, electricity and lighting networks 94 % 100 % Completed

Number of contracts: Design, execution and operation of desalination and wastewater treatment plant 84 % 99 % Under implementation 176 industrial and service contracts (including those in Development of area D of the industrial city, including construction of road, potable water, rainwater operation and those under implementation) - New Under implementation Dammam Second Industrial City drainage and wastewater networks 198 Annual Report 2019 199

Service contracts 3 Apparel 1

Other manufacturing industries 11 Pharmaceuticals 4

Food products 10 Textiles 1

Furniture 1 Chemicals and chemical products 35

Machinery and equipment not elsewhere classified 12 Paper and paper products 4

Computers, electronic and optical products 3 Coke and refined petroleum products 1

Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 3 Rubber and plastic products 20

Basic metals 6 Other non-metallic mineral products 6 Current and targeted industries and targeted Current industries and targeted Current Beverages 2 Fabricated metal products (except machinery and equipment) 35

Electrical equipment 18 200 Annual Report 2019 201

Al-Ahsa First Industrial City

Establishment year: Water and electricity services 1981

Electricity capacity Provided by Saudi Electricity Company (SEC) Location: North of Al-Ahsa in Al-Oyoon city, north of Sultaniyah Water services capacity district on Dhahran Road 2,300 m³

Wastewater treatment capacity Total area: 1,500 m³ 1.5 million m²

Developed area: Featured services Fully developed

• Health Company of Mohammed Basem and Sons of Yassin Mohammed Al-Ghadeer and Co. Distance to nearest airport: • Al-Ahsa Chamber of Commerce and Industry 42 km to Al-Ahsa International Airport branch • Civil Defense center • Shopping centers and restaurants • General Directorate of Passports branch Distance to nearest railway station: • Industrialists’ Service Center 30 km to Hofuf Railway Station • Mosques and Da’wa (propagation) office

Al-Ahsa First Industrial City

Distance to nearest port: New industrial projects 130 km to King Abdulaziz Port Completion Rate Project Name Project Status 2018 2019

Number of contracts: Rehabilitation of industrial city - phase two 90 % 100 % Completed 144 industrial and service contracts (including those in operation and those under implementation) Rehabilitation of industrial city facilities - 55 % Under implementation 202 Annual Report 2019 203

Service contracts 30 Textiles 3

Other manufacturing industries 1 Chemicals and chemical products 13

Printing 2 Paper and paper products 10

Food products 9 Coke and refined petroleum products 3

Furniture 2 Rubber and plastic products 29

Machinery and equipment not elsewhere classified 4 Other non-metallic mineral products 10

Wood and products of wood and cork (except furniture); articles of straw and plaiting materials 1 Fabricated metal products (except machinery and equipment) 17

Beverages 1 Building materials, ceramics and glass 2 Current and targeted industries and targeted Current industries and targeted Current Electrical equipment 5 Paper, printing and publishing products 1

Pharmaceuticals 1 204 Annual Report 2019 205

Other manufacturing industries 1 Al-Ahsa Second Industrial City – Salwa Food products 2

Machinery and equipment not elsewhere classified 1 Establishment year: Water and electricity services 2013 Apparel 1

Electricity capacity Textiles 2 Work underway to provide a source Location: Chemicals and chemical products 2 On the coast of the Arabian Gulf, 50 km north of Salwa on Water services capacity the highway connecting Al-Hofuf and Salwa. Under implementation, to be Coke and refined petroleum products 1 connected to the public network Rubber and plastic products 2 Total area: 301.6 million m² Fabricated metal products (except machinery and equipment) 3 Current and targeted industries and targeted Current

Developed area: 4 million m²

Distance to nearest airport: 103 km to Al-Ahsa International Airport

Distance to nearest railway station: 100 km to Hofuf Railway Station

Distance to nearest port: 240 km to King Abdulaziz Port

Number of contracts: 15 industrial and service contracts (including those in operation and those under implementation) 206 Annual Report 2019 207

- Other manufacturing industries 2 Modon Oasis in Al-Ahsa Food products 2

Furniture 1 Establishment year: Water and electricity services 2013 Beverages 1

Apparel Electricity capacity dustries 1 30 MVA Location: Textiles 1 South of Al-Hofuf, 13 km east of Al-Ahsa International Water services capacity Airport 3,000 m³ under implementation Rubber and plastic products 1 Current and targeted in and targeted Current

Total area: 543,431 m²

Developed area: Fully developed

Distance to nearest airport: 13 km to Al-Ahsa International Airport

Modon Oasis in Al-Ahsa Distance to nearest railway station: 24 km to Hofuf Railway Station New industrial projects Completion Rate Distance to nearest port: Project Name Project Status 180 km to King Abdulaziz Port 2018 2019

Design, execution and operation of potable water plants 59 % 100 % Completed

Number of contracts: Development of commercial zones’ infrastructure, including 9 industrial and service contracts (including those in oper- construction of road, potable water, rainwater drainage, waste- - New Under implementation ation and those under implementation) water, irrigation, communications and electricity networks 208 Annual Report 2019 209

Beverages 3 Hafr Al-Batin Industrial City Paper and paper products 1

Coke and refined petroleum products 3 Establishment year: Water and electricity services 2011 Rubber and plastic products 1 Electricity capacity Connection to be provided by Saudi Other non-metallic mineral products 1 Electricity Company (SEC)

Location: industries Fabricated metal products (except machinery and equipment) 1 Southeast of Hafr Al-Batin, 22 km south of Al-Qaisumah Water services capacity 1,000 m³ Building materials, ceramics and glass 1 and targeted Current

Total area: 100 million m²

Developed area: 1.5 million m²

Distance to nearest airport: 26 km to Al-Qaisumah/Hafr Al-Batin Airport

Distance to nearest railway station: 446 km to Dammam Railway Station

Distance to nearest port: 325 km to Ras Al-Khair Port

Number of contracts: 11 industrial and service contracts (including those in operation and those under implementation) 210 Annual Report 2019 211

Wa’ad Al-Shamal Industrial City

Establishment year: Water and electricity services 2012 Electricity capacity Connection to be provided by Saudi Electricity Company (SEC) Location: 20 km east of Turaif Water services capacity Under implementation, to be connected to the public network

Total area: 290 million m² Featured services

• Saudi Railway Company (SAR) stations and facilities Developed area: • Solid waste treatment plant 4.2 million m2, including a residential area of 200,000 m2 • Training facilities • Five-star hotel • Water treatment plant • Firefighting station Distance to nearest airport: • Shopping complex 18 km to Turaif Domestic Airport • Saudi Red Crescent Authority center

Distance to nearest railway station: 171 km to Al-Qurayyat Railway Station

Distance to nearest port: 1,173 km to Ras Al-Khair Port

Number of contracts: 5 Service contracts

Wa’ad Al-Shamal Industrial City 212 Annual Report 2019 213

Metal

Fertilizers

Oils

Glass

Non-metallic minerals and building materials

Medical supplies

Wood and furniture

Plastic materials

Targeted industries Targeted Chemicals and chemical products

Paper and paper products

Clothing, textiles and leather

Wa’ad Al-Shamal Industrial City Food products

Residential complexes Name Area (m2) No. of rooms Capacity

Red Sea Complex 1 345,466 600 600

Red Sea Complex 2 810,000 10,000 10,000

New industrial projects Completion Rate Project Name Project Status 2018 2019

Development of infrastructure at Wa’ad Al-Shamal Industrial City – phases A-1B 7 % 40 % Under implementation

Adjustments to fourth and fifth sectors of residential zone - 100 % Completed

Construction of first 132 kV electrical substation in Wa’ad Al-Shamal City - 16 % Under implementation

Construction of 380 kV overhead lines - New Under implementation 214 Annual Report 2019 215

Service contracts 1 Ar’ar Industrial City Food products 1

Pharmaceuticals 1 Establishment year: Water and electricity services 2009 Chemicals and chemical products 2

Electricity capacity industries Rubber and plastic products 1 18 MVA Location: Fabricated metal products (except machinery and equipment) 1 Northeast of Ar’ar, north of Ar’ar-Iraq Road Water services capacity and targeted Current 1,000 m³

Total area: 2 million m²

Developed area: 1 million m²

Distance to nearest airport: 22 km to Ar’ar Airport

Distance to nearest railway station: 226 km to Al-Jouf Railway Station

Distance to nearest port: 932 km to Ras Al-Khair Port

Number of contracts: 7 industrial and service contracts (including those in oper- ation and those under implementation) 216 Annual Report 2019 217

Modon Oasis in Al-Jouf

Textiles and natural wool yarn Establishment year: Water and electricity services 2003 (Under implementation) Specialized food processing

Electricity capacity Art and craft products Connection to be provided by Saudi Location: Electricity Company (SEC) Fertilizers Southeast of Dumat Al-Jandal, on the road leading to Al-Jouf University Water services capacity Veterinary products Under implementation, to be

connected to the public network industries Targeted Canning and food preservation Total area: 3 million m² New industrial projects Completion Rate Developed area: Project Name Project Status 979,599 m² 2018 2019

Construction of 6 purpose-built factories, each with an area of 1,500 m2 37 % 70 % Under implementation

Development of Modon Oasis in Al-Jouf, including construction of road, potable Distance to nearest airport: water, rainwater drainage, wastewater, irrigation, communications, electricity - 23 % Under implementation 17 km to Al-Jouf Airport and lighting networks

Construction of gates and fences - New Under implementation

Distance to nearest railway station: 24 km to Al-Jouf Railway Station

Distance to nearest port: 970 km to Riyadh Dry Port 218 Annual Report 2019 219

Total area of industrial cities and developed area as of 2019 end

Industrial city Total area (m²) Developed area (m²) Industrial city Total area (m²) Developed area (m²)

1 Riyadh First Industrial City 500,000 500,000 19 Al-Zulfi Industrial City 18,000,000 1,000,000

2 Riyadh Second Industrial City 19,000,000 19,000,000 20 Sudair City for Industry and Businesses 265,000,000 16,900,000

3 Riyadh Third Industrial City 1,000,000 1,000,000 21 Durma Industrial City 11,500,000 3,850,000

4 Qassim First Industrial City 1,500,000 1,500,000 22 Qassim Second Industrial City 11,800,000 2,000,000

5 Dammam First Industrial City 2,440,000 2,440,000 23 Dammam Third Industrial City 48,000,000 10,000,000

6 Dammam Second Industrial City 25,000,000 25,000,000 24 Hafr Al-Batin Industrial City 100,000,000 1,500,000

7 Al-Ahsa First Industrial City 1,500,000 1,500,000 25 Al-Ahsa Second Industrial City – Salwa 301,600,000 4,000,000

8 Jeddah First Industrial City 12,000,000 12,000,000 26 Jeddah Third Industrial City 76,383,000 24,000,000

9 Jeddah Second Industrial City 8,000,000 8,000,000 27 Modon Oasis in Jeddah 5,000,000 2,500,000

10 Makkah Al-Mukarrama Industrial City 730,000 730,000 28 Al-Baha Industrial City 3,000,000 1,300,000

11 Al-Madina Al-Munawwara Industrial City 17,000,000 10,000,000 29 Jazan Industrial City 39,000,000 2,975,000

12 Hail Industrial City 3,880,000 3,000,000 30 Najran Industrial City 6,500,000 3,600,000

13 Ar’ar Industrial City 2,000,000 1,000,000 31 Rabigh Industrial City 75,500,000 2,000,000

14 Tabuk Industrial City 4,000,000 2,900,000 32 Modon Oasis in Al-Jouf 3,000,000 979,599

15 Asir Industrial City 2,700,000 2,700,000 33 Modon Oasis in Yanbu 500,000 500,000

16 Modon Oasis in Al-Ahsa 543,431 543,431 34 Modon Oasis in Qassim 740,000 740,000

17 Al-Kharj Industrial City 99,000,000 24,000,000 35 Wa’ad Al-Shamal Industrial City 290,000,000 4,200,000

18 Shaqraa Industrial City 10,000,000 1,000,000 Total 1,469,933,431 198,858,030 220 Annual Report 2019 221

Area allotted as of 2019 end

Industrial city Allotted area (m²) Industrial city Allotted area (m²)

1 Riyadh First 470,559 19 Al-Zulfi 218,953

2 Riyadh Second 12,971,820 20 Sudair 7,367,870

3 Riyadh Third 166,647 21 Durma 492,857

4 Qassim First 1,054,019 22 Qassim Second 647,211

5 Dammam First 2,058,935 23 Dammam Third 4,598,913

6 Dammam Second 17,343,020 24 Hafr Al-Batin 394,897

7 Al-Ahsa First 966,015 25 Al-Ahsa Second – Salwa 187,606

8 Jeddah First 9,077,358 26 Jeddah Third 7,322,509

9 Jeddah Second 4,358,618 27 Jeddah Oasis 12,000

10 Makkah Al-Mukarrama 509,044 28 Al-Baha 223,089

11 Al-Madina Al-Munawwara 2,999,319 29 Jazan 1,279,557

12 Hail 1,287,908 30 Najran 817,137

13 Ar’ar 311,375 31 Rabigh 0

14 Tabuk 1,064,141 32 Al-Jouf Oasis 0

15 Asir 1,315,605 33 Yanbu Oasis 0

16 Al-Ahsa Oasis 22,121 34 Qassim Oasis 0

17 Al-Kharj 9,127,580 35 Wa’ad Al-Shamal 35,775,461

18 Shaqraa 880,525 Total 125,322,669 222 Annual Report 2019 223

Private Industrial Cities and Complexes: Private Industrial Cities and Complexes Overview

Building Today for a Bright Tomorrow Modon is committed to ensuring the highest level of care sustainable economy in line with the objective of Saudi in the development of private industrial cities across Saudi Vision 2030. Private industrial cities and complexes that Arabia. We encourage enterprises and companies to invest Modon oversees are outlined below. A central component of Modon’s mandate is to issue technology zones must meet our approved standards, in them so they can become key pillars of a diverse and permits allowing industrial cities developed by the private while we also oversee their development and operation. sector to be established – in line with authority regula- All approved controls and criteria covering construction, tions formed through the Board of Directors resolution safety and the environment are applied, as outlined in Obeikan Industrial City 35/20. Infrastructure and services at these cities and Modon’s guidelines.

Services provided during development phase Services provided during operations phase Construction: Obeikan Industrial City was established in 1427 AH 1 Study of development requests Selection of operators (corresponding to 2007) under license number 4/Kh S. 2 Coordination with government authorities Issuance of operation licenses for industrial city or technology zone

3 Approval of master plan Monitoring of operational works Location: 4 Approval of infrastructure plans Issuance of business practice permits for operators In Riyadh on Al-Kharj New Road, next to Riyadh Second Industrial City. 5 Issuance of development licenses Approval of building plans

6 Monitoring of development work Issuance of construction permits

7 Issuance of off-plan sale approvals Approval of safety plans Area: 984,500 m2 - fully developed. Issuance of business practice permits for buildings and construction 8 Handover of industrial city resumption permits

9 Issuance of completion certificates Issuance of operation licenses for buildings and factories

10 Marketing and advertising Monitoring operations of buildings Owner and Developer: Obeikan Investment Group. Key Operations in 2019

• Issued development license for Al-Fauzan Private Industrial City, which is currently 90 percent completed. Operator: • Prepared feasibility study on the establishment of technology zone at Dammam Second Industrial City and started developing technical Asas for the Development and Operation of Indus- studies. trial Cities Company. • Issued development license for Nahdi Smart Logistics Warehouse , which is currently 30 percent completed. 224 Annual Report 2019 225

The City of the Arab Company for the Development of Zamil Private Industrial City Alfanar Private Industrial City Al-Ojaimi Private Industrial City Water and Private Industrial Energy

Construction: Construction: Construction: Construction: The City of the Arab Company for the De- Zamil Private Industrial City was established Alfanar Private Industrial City was estab- Al-Ojaimi Private Industrial City was estab- velopment of Water and Private Industrial and its master plan approved in 1434 AH lished and its master plan approved in 1428 lished and its master plan approved in 1429 Energy was established in 1427H (corre- (corresponding to 2013). AH (corresponding to 2007). AH (corresponding to 2008). sponding to 2007) under license number 4/ Kh S.

Location: Location: Location: Location: South of Riyadh Second Industrial City, on In Riyadh on Al-Kharj New Road, next to In Riyadh on Al-Kharj New Road, next to In Riyadh on Al-Kharj Old Road, near the Al-Kharj New Road. Riyadh Second Industrial City. Riyadh Second Industrial City. intersection of Al-Kharj New Road and Al- Kharj Old Road.

Area: Area: Area: Area: 131,600 m2 – 75 percent has been developed 1,340,150 m2 – 95 percent has been devel- 681,600 m2 – fully developed. 1,314,400 m2 – 80 percent is developed. so far. oped so far.

Targeted industries: Targeted industries: Targeted industries: Targeted industries: The city currently focuses on electrical The city has many industrial functions and The city currently focuses on the manufac- The city currently focuses on the electrical goods, food products and building materi- service facilities while focusing on various ture of power transformers and ceramics. It panels and building materials industries. It als, and features 30 facilities. industries, notably electrical goods, food features 10 facilities. features many factories and warehouses. products and building materials. It also features 10 facilities.

Owner and Developer: Owner and Developer: Owner and Developer: Owner and Developer: Industrial Cities Development and Operat- Zamil Real Estate Company. Alfanar Company. Mohammmad Al-Ojaimi Group. ing Co. Ltd. (ICDOC).

Operator: Operator: Operator: Operator: Asas for the Development and Operation of Temporarily self-operated until the comple- Currently self-operated. Asas for the Development and Operation Industrial Cities Company. tion of development work. of Industrial Cities Company. 226 Annual Report 2019 227

Complex of Construction Products Holding Company Petro Rabigh Private Industrial City Industrial Gate City - Private Kaden Industrial Complex for Logistics Services (CPC)

Construction: Construction: Construction: Construction: Petro Rabigh Private Industrial City was The Industrial Gate City is a fully-integrated Kaden Industrial Complex for Logistics Ser- The CPC complex features two comple- established and its master plan approved in industrial city that provides services and vices provides a fully-integrated and closed mentary factories – the first manufactures 1431 AH (corresponding to 2010). infrastructure. logistical warehouses environment with a precast concrete while the second shapes unique portfolio of services in one area. steel used in concrete casting operations.

Location: Location: Location: Location: In Rabigh, next to Rabigh Industrial City. Southwest of Riyadh Second Industrial City, South of Riyadh Second Industrial City, in West of Riyadh Second Industrial City. on the intersection of Al-Kharj New Road the Heet District on Al-Kharj Old Road. and Al-Kharj Old Road.

Area: Area: Area: Area: 2,400,000 m2 - fully developed. 6,522,085 m2 – 78 percent is developed. 418,271 m2 – 97 percent is developed. 189,210 m2 – fully developed.

Targeted industries: Targeted industries: Targeted industries: Targeted industries: The city currently focuses on the electrical The city provides land for industrial, ware- The city aims to showcase the bespoke Concrete and shaping of steel used in goods and building materials industries. It housing and commercial purposes as well Logistics Park project. concrete casting operations. The complex features many factories and warehouses. as residential land and zones for general currently serves both governmental and services with completed infrastructure. private projects.

Owner and Developer: Owner and Developer: Owner and Developer: Owner and Developer: Sumitomo Chemical Company and Saudi Project owner is Masheed Arabia Company; A consortium of Tatweer Holding Company Construction Products Holding Company Aramco Company. developer is Mawten Real Estate Company. and Pan Kingdom Investment Company. (CPC).

Operator: Operator: Operator: Rabigh Refining & Petrochemicals Company Asas for the Development and Operation of Asas for the Development and Operation of (Petro Rabigh). Industrial Cities Company. Industrial Cities Company. 228 Annual Report 2019 229

Complex of Al Abdullatif Industrial Investment Complex of Riyadh Cables Group Company Complex of Saudi Ceramic Company King Salman Energy Park (Spark) Company - Eastern Textile Company (ETEX)

Construction permit: Construction permit: Construction permit: Construction permit: The Riyadh Cables Group Company complex The Saudi Ceramic Company complex Established in 1994, the Eastern Modon has issued an operations license and features three factories that manufacture provides construction solutions through the Textile Company (ETEX) is a reputable construction work in the city is expected to copper rods, high voltage cables and PVC production of ceramics, porcelain, pipes and manufacturer of quality carpet backing in be completed in 2021. granules. It delivers a wide range of copper sanitary ware. the Middle East. and aluminum products used in energy and communications that adhere to local and international standards. Location: Location: Location: South of Riyadh Second Industrial City on South of Riyadh Second Industrial City on Located 40 km away from Saudi Aramco, Al-Kharj New Road. Al-Kharj New Road. near Abqaiq in the Eastern Province and next to the GCC Railway.

Location: Area: Area: Area: South of Riyadh Second Industrial City on 423,710 m2 - fully developed. 265,785 m2 - fully developed. 50 million m2 to be developed in three Al-Kharj New Road. phases – completion is expected by 2053.

Area: Targeted industries: Targeted industries: Overall aims and targeted industries: 313,500 m2 – fully developed. Ceramics, porcelain, pipes and sanitary Primary and secondary carpet backing, • Development of supply chains ware. agrotextiles and geotextiles, polypropylene related to industries and service grass yarn, dref yarn and CF yarn. facilities supporting the energy sector in the Kingdom and the Middle East region in general. • Provision of a world-class infrastructure for global investors in Targeted industries: Owner and Developer: Owner and Developer: exploration work. Copper rods, high voltage cables and PVC Saudi Ceramic Company. Al-Abdullatif Industrial Investment • Production and refining of crude oil. granules. Company (AIIC). • Petrochemicals and electrical energy. • Production and treatment of water.

Owner and Developer: Operator: Developer: Saudi Modern Company for Metals, Cables Asas for the Development and Operation of Saudi Aramco. and Plastic Industry Ltd. Industrial Cities Company. 230 Annual Report 2019 231

Cities subject to feasibility studies Technology Zones

Modon aims to actively contribute to the achievement of that help high-tech industrial facilities thrive within an Saudi Vision 2030 and a thriving economy by localizing advanced environment driving innovation and creativity. Fal Industrial City: the development of technology. To help achieve this goal, We also prepare and provide the necessary infrastructure Studies into this city are currently being we establish and cultivate modern technology zones and services to help these industries flourish. considered, but a master plan has been approved. Final modifications to these studies are being administered by the city’s Riyadh Technology Valley leadership team.

The Riyadh Valley Company was established as King Saud and investment in creativity and innovation. The project University’s investment arm that aims to contribute seeks to employ national talents in various technology, 45 % towards economic growth by developing local technology service, knowledge and other related vital industries Completion and localizing job opportunities available in technical and with the aim of achieving sustainable development and Rate knowledge-based fields. Its Riyadh Technology Valley com- contributing to the development of a modern knowledge plex serves as a center that encourages scientific research economy.

Location Launch date

The complex is located at King Saud University’s grounds in Riyadh, 1430 AH / 2009 spanning a total area of 1.67 million m2. To implement the project, Riyadh Valley Company obtained development license no. (2/Kh T) in 30/6/1430 AH (June 24, 2009).

Project objectives Project components

• Be a global knowledge and research center that encourages • Central area: The heart of the complex that features business incuba- and fosters creativity and utilizes its output to localize technol- tors and services as well as the support office. ogy and innovation. • University area: Home to a unit that is responsible for business and • Achieve sustainable development by supporting the national research services, intellectual property, laboratories serving the local knowledge economy. market and an entrepreneurs center. • Activate and strengthen cooperation between the university • Research and development area: Features research institutes affiliated and research centers. to public and private entities as well as specialist centers. • Create an optimal environment to attract investors from • Technology companies zone: An area for meetings between companies knowledge and technology-based fields. that play a central role in Riyadh Technology Valley’s activities. • Recruit and develop creative talents. • The Scientific Village: A residential and entertainment area that contributes to the high quality of life complex employees enjoy and welcomes visitors inside and outside of Riyadh. 232 Annual Report 2019 233

Al-Raidah Digital City Wadi Makkah Technological Complex

The Wadi Makkah Company for Technology, which serves as the project’s objective is to serve the national economy and promote Al-Raidah Investment Company established its epony- zones meet the latest specifications and highest interna- investment arm of Umm Al-Qura University, set up the Wadi sustainable development by creating a stimulating and attractive mous digital city to develop the telecommunications and tional standards. To implement the project, license num- 98 % Makkah Technological Complex as a global scientific research environment for the research and development functions of 25 % technology sectors. The company continues to adhere to ber 1/Kh T was obtained on 1/7/1427 AH (July 27, 2006). center contributing towards the development of knowledge- local and international companies. This results in furthered Completion Completion Modon’s regulations and criteria that ensure technology based sectors. The project focuses on attracting talents as well cooperation with the university, development of scientific activity Rate Rate as investing in the transfer and localization of technology. It also and improved commercial output resulting from scientific seeks to actively contribute to the cultivation of a knowledge- research and innovation. To set up the project, Wadi Makkah based economy through partnerships between educational Company for Technology obtained development license number and research institutions and the business community. The 6/Kh T on 28/12/1438 AH (September 20, 2017). Location Launch date

Al-Raidah Digital City occupies a strategic position by the main roads of 1430 AH / 2009 CE Location Launch date Riyadh, covering an area of more than 800,000 m2.

The headquarters of Wadi Makkah Technological Complex is located on 1433 AH / 2012 the campus of Makkah’s Umm Al-Qura University, covering a total area of 431,087 m2. Project objectives Project components

The project aims to cultivate a dynamic environment that can attract The city focuses on three sectors - information technology, communica- Project objectives Project components and retain talents and create a self-contained society that is vibrant and tions and research and development. The complex features an innova- innovative. The city has been developed to cater to the needs of technol- tion and creativity center consisting of several areas as follows: ogy companies and create a major hub for IT activity. technical corridors, knowledge village, residential buildings and villas Wadi Makkah Company for Technology provides its services to the The project consists of a residential area, hotel, business center, innova- date palm corridor, recreation areas and parks following: tion laboratories and the national transformation initiatives complex. • teaching staff • students • innovators • entrepreneurs • start-ups • small and medium enterprises • major local and international companies 234 Annual Report 2019 235

The willpower of Saudis is as strong as the Tuwaiq Mountain

His Royal Highness Prince Mohammed bin Salman Crown Prince, Deputy Prime Minister and Min- ister of Defense of Saudi Arabia 236 Annual Report 2019 237

Chapter Five

236 Conclusion

238 Challenges and Solutions 241 Thanks and Appreciation 238 Annual Report 2019 239

Challenges and Solutions Challenge Solution

Delay in allocating and transferring ownership of industrial land to Modon, and non-allocation of industrial sites within main cities. Work is underway in cooperation with the Ministry of Municipal and Rural Affairs to allocate land suitable for industrial use.

Workshop held in partnership with the Saudi Industrial Development Fund (SIDF), Social Development Bank (SDB) and General Attracting industries to promising zones Authority for Small and Medium Enterprises to attract industries to promising zones and develop an attractive investment envi- ronment.

The Ministry of Energy, Industry and Mineral Resources is working on activating national strategy to attract promising industrial Attracting promising and unique industrial investments to Saudi Arabia investments. Modon responsible for enabling and attracting promising and unique industrial investments to the Kingdom as part of the industry and mineral resources system.

Third executive plan for Modon initiatives within the National Industrial Development and Logistics Program (NIDLP) approved Availability of budgets to complete services in industrial cities. with total funding of SAR1.15 billion ($305.9 million).

Linking industrial cities via railways and public transport to reduce operating expenses for industrial partners. Relevant study submitted via NIDLP.

Memorandum of understanding signed with the Ministry of Communications and Information Technology (MCIT) to facilitate cooperation in the pro- vision of communication services including communications towers and development of digital infrastructure such as fiberoptic networks. This would be achieved by encouraging operators to invest in and fund such initiatives through Saudi Vision 2030 realization programs. The MoU also provides for Provision of communication towers in industrial cities through operators cooperation in the areas of basic digitization, digital transformation and smart solutions, in addition to supporting Modon in enabling Industry 4.0. The first phase, covering five industrial cities, has been completed. The second phase, covering seven industrial cities, is in procurement stage. All industri- al cities will be provided with communication services by 2023.

Relevant authorities and regional secretariats cooperated in the issuance of mandatory licenses and earmarking of specific sites Lack of solid and liquid waste landfill sites near industrial cities. for landfill purposes.

Provision of gas services in industrial cities. Modon coordinating with Ministry of Energy to connect natural gas services to its industrial operations.

Modon discussing proposed governance for technology zones through committee focused on developing clear model enabling Overlapping authority between different organizations involved in establishment of technology zones and lack of governance effective establishment and operation of competitive technology zones, chaired by Governor of the Saudi Standards, Metrology model for such projects. and Quality Organization (SASO). 240 Annual Report 2019 241

Conclusion

This annual report was prepared in line with the principles In this report, Modon demonstrates its contributions of transparency that are central components of Modon’s to the National Industrial Development and Logistics development strategy – which in turn aims to achieve the Program (NIDLP) in line with the objective of Saudi Vision highest levels of corporate performance and operational 2030 to enrich and diversify the national economy. We excellence through effective self-evaluation. Our journey highlight efforts to increase the role of Saudi women to promote industrial development in Saudi Arabia has in national industrial development as well as the been extensively outlined as well as an overall strategy, steps taken to improve our employees’ performance. key initiatives and products geared towards upgrading Modon’s achievements in the areas of corporate social industrial city infrastructure. The capacity to create responsibility, environmental protection and health and an environment capable of attracting and localizing safety, particularly that of workers at industrial cities, are investments is also covered comprehensively; such also explored. ventures ensure the success of industry enablement In conclusion, we ask Allah to ensure our work continues initiatives and encourage the contribution of the private to benefit our country and its citizens, protect our leaders sector to the gross domestic product, particularly from and grant safety, security, stability and prosperity to us all entrepreneurs and small and medium enterprises. forever. Thanks and Appreciation

Modon would like to thank those who supported the production of this 2019 Annual Report, particularly those employees, leaders and the Board of Directors who helped enrich the overall content. Their sincere efforts, adminis- trative and technical support helped us overcome produc- tion challenges and achieve a successful outcome. Allah is the Arbiter of Success 242 Annual Report 2019 243 modon.gov.sa