35 industrial cities, more than 3,500 factories consolidating Saudi Arabia’s transformation into leading industrial power

Saudi Press Agency (SPA) has published a report on how numerous outstanding achievements by the Saudi Authority for Industrial Cities and Technology Zones (MODON) have created the optimum environment for localization of investments, provided opportunities for industries to expand.

MODON has enhanced the qualitative characteristics of the investment environment in Saudi Arabia and the high standard of services on offer have been transforming the Kingdom of Saudi Arabia and inexorably consolidating its status as a leading international power, SPA said.

"MODON is making the most of the cooperation and complementarity relations with both public and private sectors to strengthen its strategy that aims to empower the industrial sector, to contribute to the development of local industry, and to attract local and foreign investments that add value to its industrial cities.

Established in 2001, MODON now oversees 35 industrial cities that include 3,500 productive factories and employ around 500,000 people.

The developed industrial lands in the industrial cities exceed 198.8 million square meters and they are geographically distributed. There are three sectors under which all the industrial cities in the Kingdom fall. There are cities of the Eastern Sector, the Central Sector, and the Western Sector, scattered to cover the regions of the Kingdom, with a total investment amount exceeding SR 367 billion.

MODON also provides several advantages, products, services, and incentives that meet the requirements to attract investments from the Gulf Cooperation Council (GCC), Arab, and global markets to Saudi Arabia.

As a part of the Saudi Vision 2030, Saudi Arabia has established the National Industrial Development and Logistics Vision Realization Program  (NIDLP) that aims to transform the Kingdom into a leading industrial power and an international logistics platform in a number of promising areas.

It focuses on the fourth Industrial Revolution in a way that will generate ample employment opportunities for Saudi citizens, boost trade balance and maximize local content.

The program focuses on four key sectors -industry, mining, energy and logistics and designs and provides a range of essential enablers that include developing appropriate systems, providing the required financing, developing infrastructure, industrial lands and private areas, and enhancing research and innovation.

Within this framework, the Director-General of MODON, Khalid bin Mohammed Al Salem, said in a statement to the Saudi Press Agency (SPA) that the Saudi Vision 2030 has adopted industry as a strategic choice to diversify the Saudi economy towards achieving sustainable development.

MODON has become one of the pillars of the Saudi Vision 2030 as an enabler of the industry that oversees 35 industrial cities around the Kingdom and through assigned initiatives by NIDLP, he added.

MODON has launched its new strategy aiming to enable the industrial sector, contribute to the development of local industry, strengthen local and global partnerships to attract local and foreign investments that have the added value and to transfer and localize industrial knowledge in the industrial cities.

Al Salem said MODON approach is based on integration, cooperation, and building on what prior achievements to provide continuous development at the level of the internal work environment, relationships with local and foreign investors, government agencies, and with private and public sectors.

"In the past, we focused on expanding the scope of MODON from providing major infrastructures to playing an active role as an enabler of industry, enhancing factories industrial competitiveness, promoting the ease of doing business by reducing the number of required industrial licenses and expanding their validity period, and reducing the time and requirement to obtain industrial licenses," Al Salem said.

"This in addition to cooperating with competent authorities to facilitate access to credit and to provide advanced infrastructures and internet services in cooperation with the Ministry of Communications and Information Technology."

 MODON also launched new products that are provided to its industrial partners and the number of products increased from only four in 2015 to 14 by the end of 2019, he said, adding that the industrial sector will witness the positive impact of these products on micro, small, and medium enterprises and contribute to strengthening supply chain in Saudi Arabia.

He added that MODON has succeeded in promoting the growth of the privatization of industry, both in the quality and quantity aspects in the industrial cities, supported by providing a number of incentives.

Promoting the growth of privatization is supported by some of MODON’s new products, launched in 2019. MODON has witnessed a growing demand for these products, despite the fact that some of them were trial products.

Al Salem stressed that privatization numbers have exceeded expectations and that the "ready-built factories" product keeps attracting investors.

Saudi Arabia is witnessing high growth in qualitative industries with high added value.

In 2019, the contracts for food manufacturing became five, while the industrial contracts for pharmaceuticals manufacturing witnessed an increase of 70% over the same period in 2018.

These industries represent strategic importance to the Kingdom and its medication safety, along with their positive impact on increasing the exports of Saudi Arabia.

In 2019, there was also the launch of the operations of food and pharmaceutical factories in Saudi Arabia, Al Salem said.

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

Dammam Second Industrial City hosts Siemens Co., Ltd. two industrial factories; the first factory, over 70,000 square meters, makes gas turbines, while the second factory, over an area of 1,500 square meters, produces automatic control panels.

Other investments have been attracted by MODON which has signed a contract with Pharco Pharmaceuticals to build a pharmaceutical complex including research and development centres for Pharch, covering more than 62,000 square meters in Madinah Industrial City.

SKAI Group, specialized in treating rocks and specific metals, is another investment attracted by MODON. It will build its factory in Dammam Third Industrial City over 100,000 square meters. MODON has also designated one of the ready-built factories in Dammam Second Industrial City for Italian CEG specialized in Uninterruptible Power Supply (UPS).

MODON and the General Authority for Military Industries (GAMI) have signed an agreement, to attract high-quality local and foreign investments to transfer and localize qualitative technology in the industrial cities.

According to the agreement, the two sides will guide licensed investors toward targeted fields in Saudi industrial cities affiliated with MODON. They will also provide incentives to investors, in addition to working on providing industrial constellations for targeted military sectors, along with options for investors to support the establishment and empowerment of the project and ensuring its expansion, sustainability and development.

MODON attracted Science Technology Company to establish a complex for the military industries in Al Kharj Industrial City over 27,000 square meters.

MODON has also designated industrial land in Riyadh Second Industrial City for INTRA Defense Technologies, as the first factory in Saudi Arabia to produce unmanned air vehicles. This agreement contributes to promoting investment in military industries and makes it an important pillar for economic development according to the objectives of the Saudi Vision 2030 that aims to localize 50% of military equipment spending by 2030. 

Al Salem said there are two factories under construction specialized in food covering an area of around 34,000 square meters, one in Sudair City for Industry and Businesses and the other in Jeddah First Industrial City, belonging to Alshaya International Group.

MODON also signed a cooperation agreement with China's TEDA Investment Holding Co., Ltd to attract manufacturing industries with high added-value to Dammam Third Industrial City, where an area of 1,000,000 square meters space has been designated for qualitative foreign investments.

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

MODON and its partners in the public and private sectors work to provide a logistic environment, serving Saudi Arabia in general and the industrial sector in particular

MODON has attracted a large number of logistic partners to its industrial and logistic cities, covering a total area of 2,500,000 square meters, distributed across logistic zones, trucks yard and yards for storage provided with integrated services, in addition to many other services.

The Director-General of MODON said that along with the increasing demand in the logistic sector, the dedicated zones have been increased by 60% in 2019 over 2018.

MODON also aims to increase the scope of its logistic services to be in line with the objectives of the Kingdom’s Vision 2030. It works on providing a number of dedicated zones, products, new services, in addition to integrating and interconnecting with importing, exporting, and transportation agencies in the public and private sectors.

Some of the most prominent logistic companies with which MODON signed agreements are Naqel in Arar and Madinah and Starlinks in Jazan, Tabuk, and other zones; moreover, MODON’s logistic zone in Jeddah First Industrial City has been expanded into a smart logistics zone having integrated services with LogiPoint Company, and covering an area of 120,000 square meters.

In line with the Digital Transformation and the Fourth Industrial Revolution, MODON in partnership with the Saudi Industrial Development Fund and King Abdulaziz City for Science and Technology ( KACST) launched the National Productivity Program to support factories in achieving the highest averages of production efficiency, and to enable the factories to adopt the technologies of the 4th Industrial Revolution.

The first phase of the program that includes working with 20 factories was launched in April 2019 in cooperation with General Electric, while the second phase will be launched in 2020 with 40 factories, enabling them to be leading and encouraging for others to shift toward the technologies of the Fourth Industrial Revolution.

Three workshops were held in Riyadh, Jeddah, and Dammam to introduce the program to factories and to announce its launch and the standards for selecting the factories. They were attended by more than 200 factory representatives.

MODON has selected 15 factories until now, and ten transformation plans have been handed to them.

The Director-General of MODON said that the Fiber Optic Internet coverage increased in the industrial cities by the end of 2019, and five industrial cities are connected to fibre optic cable to provide super-high speeds.

MODON also worked to provide and cover the industrial cities with 4G cellular network and signed contracts in the fourth quarter of 2019 to establish around ten telecommunications towers, which will contribute to the provision of required infrastructure to transfer to the fourth Industrial Revolution and its technologies.

MODON continues to work on developing and digitizing its services to improve the partners' satisfaction. In this regard, the time for accepting applications has been reduced from 60 days to less than 15 days, for issuing permissions from seven to three working days, the duration of modifying the “ partner contract “ from 20 to 10 working days.

Issuing an operating license concerning safety measures has been reduced from 20 to seven working days and approving plans from 15 to five working days.

Within its framework of supporting entrepreneurship and small and medium enterprises, MODON provided for the enterprise's many products, services, and financing solutions in partnership with the concerned authorities.

MODON has succeeded to increase the number of ready-built factories to 541.

In 2019, MODON launched different products including "Land and industrial loan" and "Factory and industrial loan" in cooperation with Saudi Industrial Development Fund (SIDF) and OSOS, a financing product in cooperation with the Social Development Bank. It also signed an agreement with Manafa Capital to provide crowdfunding for entrepreneurs and small and medium enterprises (SMEs) included in the industrial cities.

Al Salem said that MODON has signed many agreements to provide non-financing products and services, such as "Return to Work Basics" workshop that was conducted in 2019 in cooperation with Dulani Business Center. It also issued laws and regulations for food trucks to support entrepreneurs and enable them to provide services in the industrial cities.

MODON also works in cooperation with different agencies to support the local content.  In cooperation with the Saudi Basic Industries Corporation (SABIC,) MODON launched the "Nusaned" initiative that aims to provide incentives and support packages for industrial investors.

In addition, MODON made an agreement with the Saudi Aramco’s Entrepreneurship Center “Waed” to support small and medium entrepreneurial businesses in MODON’s industrial cities and to stimulate industries with added-value.

The Saudi Authority for Industrial Cities and Technology Zones (MODON) has a high sense of social responsibility and it is committed to the objectives of the Saudi Vision 2030.

MODON works to provide environmental protection and to encourage the best practices in the protection of the environment, such as recycling, fighting desertification, and the conservation of natural resources through providing a balanced strategy between the requirements of the environmental protection and the conservation of natural resources, thus contributing to the achievement of sustainable development.

In this regard, MODON launched a "Zero Waste" program to promote environmental sustainability and to reduce manufacturing wastes into zero waste. The awareness campaign "We won't be complacent ... Our environment deserves it” that was launched in the industrial cities stressed on the importance of using biodegradable plastics.

MODON also signed a cooperation agreement with the Environment Friends Society in Dammam to raise environmental awareness among the members of the industrial cities in the Eastern Region. The agreement had a major role in localizing an important technology for environmental protection - the technology of recycling wastes.

MODON also signed a tripartite partnership agreement with Charity Organization for Orphans in Riyadh Region "Ensan" and Recycling of Electronic and Electrical Equipment "Tadweeer" as part of "imprint" initiative which comes under the slogan "sponsor an orphan with your old devices". According to the agreement, MODON recycles old electronic and electrical waste, then using the outputs of recycling by converting them into raw materials for other industries, and then directing their full value to support the activities of "Ensan" Organization.

In line with its role toward social responsibility and sports sector, MODON supports and encourages a healthy lifestyle in its industrial cities.

It annually organizes sports championship and in 2019, MODON organized the second MODON's championship with the participation of 84 teams of company and factory employees, which contributed effectively to the improvement of the working environment, production rates, and boosting sports practices within the communities of the industrial cities.

MODON’s championship contributes positively to the achievement of Quality of Life Program, one of the programs of the Saudi Vision 2030.

Another MODON achievement is establishing "MODON Lake" - the largest developed industrial lake in Saudi Arabia.

The lake is renewable water treated in an environmentally friendly manner within Dammam Second Industrial City. The total area of the lake project is 400,000 square meters, and the lake itself spans 210,000 square meters, constituting 52% of the project.

MODON also trialled "MODON Tech" project in the information centre of MODON Lake to develop and establish programs for male and female students to raise their awareness on industry and modern technologies of the fourth Industrial Revolution.

MODON intensified efforts to support and empower women in the business sector, empowering them to contribute to the national economy through work in factories. It also provided childcare facilities in Dammam First Industrial City and Riyadh Second Industrial City.

MODON also aims to expand services supporting women’s work and empowerment in the labour market of the industrial sector and the number of Saudi women working in factories has so far reached 17,000.

In this regard, MODON signed a partnership agreement with Prince Sultan bin Abdul Aziz Fund for Women Development to set up a social-technological innovation centre in Dammam First Industrial City, which includes incubators, business accelerators, and equipped technical laboratories with full equipment.

MODON also signed with Saudi Women's Innovation Foundation a Memorandum of Understanding (MoU) to work on the development of industry and industrialists in Jazan and enable small and medium enterprises to start their investments within the industrial cities in the region.

In terms of holding awareness forums and activities, MODON holds general and specialized workshops and forums in its industrial cities.

In partnership with the Saudi Export Development Authority, General Authority of Zakat and Tax, and the Saudi Industrial Development Fund (SIDF), MODON held many workshops and forums targeting its industrial partners.

MODON also hosted numerous awareness workshops covering the environment, health and safety, and laws of hazardous factories."