MODON
Saudi Industrial Property Authority
Tokyo, Japan Jan 31 - Feb 2, 2012 Outline
• Saudi Arabia’s Economy
• Japanese - Saudi Investments Partnership
• National Industrial Strategy Vision & Objectives
• MODON in Brief
• Investment Incentives
• Our Clients
• Our Industrial Cities
• MODON’s Supply Chain Projects
• MODON’s Infrastructure Projects Saudi Arabia’s Economy
Saudi Arabia’s Economy 2011
National $577 GDP (in Billion USD)
Per Capita GDP $20,328 6.77% GDP (USD) growth
Industrial Export Import 28.27% 35.73% 1.45% sector growth growth growth
Contribution of exports 61.6% to GDP
Source : Central Department of Statistics & Information Saudi Arabia’s Economy
Gross Domestic Product by sectors at Current Prices (Billion USD)
350
300
250
200 Oil Sector Non- Oil Sector 150
100
50
0 2007 2008 2009 * 2010 * 2011
Source : Central Department of Statistics & Information Saudi Arabia’s Economy
Gross Domestic Product sectors breakdown at Current Prices (Billion USD)
350
300
250
Oil Sector 200 Private Sector Govt. Sector 150 Industrial Sector 100
50
0 2007 2008 2009 * 2010 * 2011
Source : Central Department of Statistics & Information Saudi Arabia’s Economy
Gross Domestic Product of the Industrial sector at Current Prices (Billion USD)
40
35
30
25
20
15
10
5
0 2007 2008 2009 * 2010 * 2011
Source : Central Department of Statistics & Information Saudi Arabia’s Economy
Saudi Industrial Development Fund (SIDF) Loans (Million USD)
3,000
2,500
2,000
1,500
1,000
500
0 2006 2007 2008 2009 2010
Source : SIDF Japanese - Saudi Investments Partnership
1 Number of 50+ Companies Started from mid 70’s
2 Total $2,5+ Billion USD Investments Petrochemical, Chemical, Water & Energy, and Services
3 Largest $1,5 Billion USD Investment Petro Rabigh
4 Latest ISUZU Motors Ltd. Investment
Source : JETRO - Riyadh Japanese - Saudi Investments Partnership
Japanese - Saudi Investments By Decade (Million USD)
T A R G E T E D
Source : JETRO - Riyadh NIS, manufacturing identified as a key development sector Goal is to diversify away from oil and gas and develop human capital
"Manufacturing is our strategic choice to diversify the economy"
Vision Key strategic goal
"A globally competitive industry, based on "To increase the contribution of the innovation and acting as a major tool in manufacturing sector to the GDP transforming national resources into sustainable to 20% … " wealth"
Source: KSA National Industrialization Strategy document, Factiva NIS strategic goal to be achieved by reaching four targets Four targets help reach strategic goal of 20% manufacturing contribution by 2020 Four targets are interrelated
1 1 GDP Increasing manufacturing Grow Man. 3x GDP threefold GDP 3 4 More export More value oriented 2 add sectors Manufacturing Increasing share of Saudi More jobs sectors Saudization labor in manufacturing to -> 30% 30% More Saudi More Saudi involvement Employment involvement "nice jobs" "int'l jobs" 3 Increasing share of Share of tech "technology"/value add man products More jobs manufacturing products for Saudis -> 60% to 60% 2 Saudi 4 employment Share of exports Increasing share of exports in man revenues versus domestic -> 35% revenues to 35%
Source: KSA National Industrialization Strategy document; BCG analysis Eight improvement axes identified to achieve NIS targets
NIS axes Description
1 • Improve macro-economic policies (i.e., monetary and fiscal policies, wages) Overall business • Stabilize micro-economic indicators (to attract local and foreign investments) environment • improve trade policies and market competition
2 • Stimulate industrial diversification and achieve balanced development Industrial complexes • Important factors behind industrial development • Stimulate innovation and development by sharing skills
3 • More attention should be devoted to SMEs (i.e., industrial SMEs support, industrial SMEs Business community incubation, business resources center, competitiveness development and industrial and SMEs modernization center, industrial financing mechanisms)
4 • Link R&D efforts with development processes (i.e., linking science and technology network Industrial innovation with innovation in industrial companies, linking educational output to labor market needs) and productivity • Promote innovation in small and medium scale industrial facilities
5 • Ensure the availability of technically and scientifically qualified and well-trained resources HR development • Train personnel to deal with, develop, and maintain modern machinery and equipments
6 Infrastructure and • Develop infrastructure in the traditional industrial regions and the new industrial cities/zones logistics support • Enhance provision of industrial services and supportive activities (i.e., handling, shipping, storage)
7 • Move the Kingdom towards higher technology-content industries New industry • Provide continuing support for the development of existing industries which have earned verticals successful comparative and competitive advantages (i.e., petrochemicals)
8 Governance mechanism • Manage the implementation of NIS
Source: NIS; BCG annalists MODON in Brief
• History . Established in 2001 . Independent, self-funded public organization • Roles . Regulate, develop and promote industrial properties and technology zones • Facts . Overseas 75 million m2 . 34.5 million m2 developed during the last 3 years . 86% growth of land developed now VS. 40 years ago . 300,000 Employees . 3,000 factories MODON in Brief
Increase Industrial Lands to 150 million m2 in 2015
160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Investment Incentives
Competitive Advantages Incentives
State of the Art Infrastructure Starting from ¢27 / M2 / year
Largest Market in ME Subsidized electricity rates
One Stop Shop Tax exemption (for equipments & raw materials) Housing & Commercial Centers Government financing up to 75%
Competitive Leasing Rates in GCC Export Financing Program
Industrial Cities around KSA Human Resources Support Program Our Clients - Local Our Clients - International Existing Industrial Cities
1. Riyadh 1 11. Assir 2. Riyadh 2 12. Al- Jouf 3. Jeddah 1 13. Tabuk 4. Jeddah 2 14. Hail 5. Dammam 1 15. Najran 6. Dammam 2 16. Jazan 7. Makkah 17. Rabigh 18. Al-Kharj 8. Madinah 19. Ar’ar 9. Qaseem 11. Al- Ahsa Existing Industrial Cities Existing Industrial Cities
Cities Under Development
1. Riyadh 3
2. Jeddah 3
3. Dammam 3
4. Sudair
5. Qaseem 2
6. Al-Zulfi
7. Shaqra
8. Hafer Al-batin
9. Al-Baha 1 Existing Industrial Cities Existing Industrial Cities Existing Industrial Cities Existing Industrial Cities Existing Industrial Cities
Cities Under Planning
1. Jeddah 4
2. Salwa
3. Al-Baha 2
4. Military Industries Complex (Al Kharj)
MODON Number of Factories
1200
1000
800
600
400
200
0 MODON in Numbers
Category #
Existing 19
Under Development 9
Under Planning 4
Factories 3,000+
Labor 300,000+ Electronic Services
• Electronic Services . Sadad . PMS . E-MODON . GIS
MODON’s Supply Chain Projects –3PL –Containers terminal –Dry Port –Rail freight
MODON’s Infrastructure Projects International Codes in Standard & Specification
• Roads . ASTM . AASTHO
• Utility . ACI . BS . ASA . ASCE
Infrastructure Projects during the past 4 years Infrastructure Projects during the past 4 years
Study / Survey $ 28 Development $ 480 Rehabilitation $ 72 Utilities & Services setup $ 533 Total $ 1,113
*In Million USD Infrastructure Projects for the next 5 years Infrastructure Projects for the next 5 years
Study / Survey $ 80 Development $ 1,333 Rehabilitation $ 266 Utilities & services Setup $ 1,333 Total $ 3,012
*In Million USD Thank You
www.modon.gov.sa +966920000425