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TBY talks to Khalid Mohammed Al Salem, President of the National Industrial Clusters Development Program (NICDP), on opportunities for investors, improving regulations, and goals for 2016.
28 December 2016

What are the specific industrial opportunities for foreign investors?

We, at NICDP, are becoming more proactive as we look for major foreign investors to discuss with them the opportunities in the automotive industry. The facilities and incentives offered by the Saudi government are also a major point of discussion. Presently, we are in the process of negotiations with certain major OEMs. In addition, NICDP seeks to attract investors at the downstream industries level, such as auto parts, specialty plastics, pharmaceuticals, and rubber, for example. NICDP teams then arrange visits to the prospected investors rather than just hosting typical meetings and exhibitions in the Kingdom. Specific proposals and packages are offered. If investors do not view such offers as satisfactory, then the proposals would be reworked to the satisfaction of both the investor and the government. Our aim is to access companies that operate in the aerospace and automotive industries. The NICDP has supported the Ministry of Petroleum and Mineral Resources and Ministry of Commerce and Industry in establishing the production of aluminum and titanium complexes. These two materials are important in a number of industries, such as aerospace, automotive, and medical, for example. Now, we are looking into these opportunities and conducting studies about what type of aerospace components we can produce out of these materials. In plastics, NICDP supported the establishment of industries like specialty chemicals, rubber and carbon black, as well as engineering plastics such as acrylonitrile butadiene styrene (ABS), PolyAcetyle (POM), and PMMA. In addition to its work with foreign companies, NICDP also works with Saudi companies and investors to make these industries a reality. We, at the NICDP, conduct technical and market assessments for Saudi Arabia and the region to help investors carry out their feasibility studies. As part of our metal cluster, we work with Saudi investors to see how they can satisfy local needs in the production of metal parts, for example the Riyadh Metro project. NICDP is studying the localization of nationally strategic industries for chemicals and equipment/parts in the area of water desalination and power. NICDP represents the business development arm of the government, working to crystalize opportunities. Now, we are initiating mapping of the industries inside Saudi Arabia, which will be available to the public.

How would you assess the regulatory framework that is currently in place?

HE Dr. Tawfiq Al Rabiah, NICDP Chairman and Minister of Commerce and Industry, is working with us and other industry-related organizations to improve the environment to do business in Saudi Arabia. For example, he also chairs the Saudi Industrial Development Fund and considers what the fund can do to support investors. Regarding the industrial cities, we are moving forward from just providing land to getting buildings ready for the investor. The minister is also considering other government regulations related to local procurement and labor laws to support local industry. He is working with the support from the government with other ministers to create a good package for industry and investors.


What are the goals for the NICDP in 2016?

In the first place, our emphasis will be on attracting the automotive industry. We have some potential projects now with global OEMs we are working with. In the pharmaceuticals industry we are concerned with the vaccine sector, which is strategic because it relates to the country's national security. We are pushing this area forward to create flexible manufacturing facilities in Saudi Arabia that can produce vaccines of high priority for Saudi nationals. We are also working with higher education institutions to bring scientists together to form a center for developing new vaccines as an enabler to this facility. In metals and minerals, we are focusing on attracting investment in aerospace and industrial components suppliers leveraging the available raw materials in the Kingdom. In the petrochemical area, we will continue the effort to establish value-added downstream industries such as tires, industrial rubber parts, and specialty intermediates to enable the production of finished products.