Industrial and logistics components are central to KAEC’s vision – inward investment that enables vibrant social and economic growth and lies at the heart of Vision 2030 objectives.
The city’s industrial and logistics infrastructure gained significant pace in 2019, marking exciting progress in the evolution of what is fast becoming a truly multidimensional ecosystem of investment, manufacturing and world-class connectivity.
From strategic dialogue with a number of government entities to the activation of new zones and services, 2019 was a year of great significance in the pursuit of sustainable economic growth and the quality of life for all those who work, live in, and visit KAEC.
Boosting investment through dialogue
The close alignment between KAEC and the Saudi Government on social and economic goals provides major scope for strategic collaboration. In 2019, we engaged with multiple government departments, regulators and other specialized entities, helping to identify new developmental opportunities and operational strategies. This collaboration led directly to positive action – a catalyst for investment and a boost to growth at KAEC and across the surrounding region.
As a result of our cooperation with policy makers, five notable engagements were signed in 2019, particularly those with the Saudi Industrial Development Fund and the Saudi Export Development Authority. These landmark decisions provide a framework for new lines of finance for investment in export facilities and localized manufacturing.
We also collaborated with the Ministry of Housing, which led to an engagement that provides scope for activating a new Building Systems Cluster. And an engagement with the General Authority for Military Industries will lead to the activation of light defense sub-sectors within KAEC.
Further industrial development opportunities will flow from an understanding reached with the National Industrial Clusters Development Program.
Opening up new sectors
Substantial progress has been made in the development of other new industry sectors, including renewables, light defense and building systems.
Promising talks with the Government on the renewables sector reflect our shared commitment to fulfil the Vision 2030 goal of sustainable and responsible economic development. Practical progress took the form of a deal with International Wind Power Company (a subsidiary of Al Babtain Power & Telecommunication) where the company leased a 102,000 m2 site in 2017 to build wind turbine components.
These partnerships will further strengthen the world-class infrastructure and facilities at Industrial Valley. Reputationally, the progress made in 2019 reinforces KAEC’s position as a major regional player and investment destination of choice in logistics and light industry, providing a strategic impetus for localized manufacturing and meeting the Kingdom’s renewables targets.
The activation of a light defense sector in collaboration with the General Authority for Military Industries (GAMI) shows enormous promise for the nation’s defense value chain, job-creation and manufacturing excellence.
New business clusters and economic zones
Signing our first tenant within the new Building Systems Cluster that was launched in 2019 was doubly significant in marking the piloting of a new special economic zone. Special economic zones are an important ingredient in the Vision 2030 National Industrial Development and Logistics Program because of their ability to attract inward investment and transform the Kingdom into a leading power in industry and international logistics.
Our Industrial & Logistics value proposition was clearly preferred in 2019, with tenant attraction in progress across a range of sectors including logistics, pharma, packaging, automotive, building materials, and automation and data exchange in manufacturing technologies and processes.
As these sectors develop, they will generate jobs for Saudi nationals, correct the national trade imbalance, and maximize local content across targeted sectors in Industrial Valley. This forms part of our multi-dimensional ecosystem of job creation, inward investment, localized manufacturing, and the creation of a rich local and national value chain.
Modern and technically superior industrial and logistics infrastructure is at the heart of KAEC’s vision, largely due to our strategic location at the crossroads of continents. Our port, our industrial zone, and our high-speed rail connection to Jeddah, Makkah and Medina ensure that this combination of logistics and location will continue to be an area of strength.
