Saudi Arabia’s first-ever project to create an industrial park for foreign companies is finally kicking off. Sixteen small and medium-sized enterprises from South Korea with technologies in eco-friendly vehicles, renewable energy, medical and bio, information technology (IT), and light and heavy industries traveled to Jazan City, Saudi Arabia from November 27th to 30th to sign an agreement with the Royal Commission for Jubail and Yanbu (RCJY) forming a local joint venture (JV) and securing land for production. The RCJY, established by Saudi royal decree in 1975, was granted financial and administrative autonomy to develop Jubail and Yanbu into industrial cities and manages Jazan Industrial City, a center for primary and downstream industries.
This Saudi-Korea Industrial Village Project (SKIV), boasting an initial investment of approximately $6 billion, is a key part of Saudi Crown Prince Mohammed bin Salman’s Saudi Vision 2030 to move the country away from an oil-centric economy. Saudi International Industrial Village Company, or SIIVC, signed an official agreement with the RCJY to promote SKIV. Sixteen Korean SMEs will receive full funding from the Saudi Industrial Development Fund (SIDF) and SIIVC to build factories and equipment in the industrial village on the condition that they will transfer technology and hire local labor. Once SKIV is up and running, the annual revenue to be generated by the 16 Korean SMEs will hit $3.5 billion, according to the SIIVC.
Jazan is one of the new special economic zones designated by the Saudi government in May 2023, alongside Riyadh, Ras Al-Khair, and King Abdullah Economic City. Resident companies will be entitled to exemptions from customs duties on machinery and raw materials, wage subsidies, full foreign ownership, and relaxed regulations on hiring foreign labor. Jazan Industrial City, where SKIV will be located, has 19.4 kilometers of coastline and one of the three major Saudi ports bordering the Red Sea along with Jeddah and Yanbu. Opened in 1976, Jazan Port serves as Saudi Arabia’s main gateway for importing and exporting goods to Africa.
Korean SMEs are expected to play a key role in the kingdom’s economic and industrial structural reforms.
Ace Valve will produce and supply industrial valves. The company’s valve technology will be applied to connect and control pipes to move oil, water, and gas at the NWC and Aramco, among others. It has acquired $380 million in investment and aims to capture a market of $500 million to $750 million, or about 30 percent of the Saudi industrial valve market that is estimated at $1.5 billion annually.