Saudi local industry secured $21 billion in investment in 2021 – minister

RIYADH, March 7 (Reuters) – Saudi Arabia attracted 81 billion riyals ($21.6 billion) of investment in the industrial sector in 2021, both for the private sector and for joint ventures with government entities, said the Saudi Minister of Industry on Monday.

The kingdom has set lofty goals to diversify its economy and reduce its dependence on oil, pouring hundreds of billions of dollars into a plan called Vision 2030 initiated by de facto Crown Prince Mohammed bin Salman.

The prince’s plan centers on developing a local industry, but there have been hitches and delays as the kingdom has struggled with a lack of skilled labour, bureaucratic issues and cost challenges and technology transfer.

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“This industrial sector in general is growing. I mean, we saw 2021… We made more than 81 billion riyals of new investments coming in the year,” Bandar Al-Khorayef said. , Saudi Minister of Mines and Industry.

Al-Khorayef spoke to Reuters on the sidelines of the kingdom’s premier arms fair, the World Defense Show, as the country hopes to transition from being primarily an arms importer to a sophisticated manufacturer and exporter.

A series of joint ventures between Saudi companies and the world’s leading aerospace and defense manufacturers have been announced in recent years as part of this strategy to locate certain industrial capabilities. The minister said many of these partnerships are still under discussion while some have been canceled after review.

“Some of them probably didn’t make sense and we have to be realistic,” he said.

“Getting into a joint venture is a big deal, so having a specific partner for any business takes time…You have to make sure you choose the right partner because it’s going to take a long time,” he added.

The minister did not specify which joint ventures had been cancelled, but said he wanted the localization process in the defense sector to go faster.

“Certainly, I’m not satisfied. You know, we have big ambitions but manufacturing capabilities take time,” Al-Khorayef said.

Riyadh plans to invest 12 trillion riyals by 2030 to help refocus the economy away from oil, while giving foreign companies until the end of 2023 to set up headquarters or risk losing government contracts as it competes with regional heavyweights, particularly the United Arab Emirates, for foreign capital and talent.

Saudi officials say much of the plan is still in its early stages and money will start flowing more and more into the kingdom over the next few years.

The minister said the kingdom is ready to work with Western or other companies, regardless of their origins, as long as they “share a long-term vision” and “have the right technology needed by the kingdom”.

Al-Khorayef said he was unable to comment on the government’s stance on business relations with Russian companies as the West imposes sanctions on Moscow for its invasion of Ukraine.

($1 = 3.7519 riyals)

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Reporting by Aziz El Yaakoubi and Alexander Cornwell

Our standards: The Thomson Reuters Trust Principles.

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