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Demand for ready-built factories up in Saudi Arabia during Covid

Jun 24, 2020 6:36 PM

The novel Coronavirus (Covid-19) crisis has revealed the importance of ready-built factories for the Saudi economy as they provide the urgent needs of the local market for various food and medical products...

The novel Coronavirus (Covid-19) crisis has revealed the importance of ready-built factories for the Saudi economy as they provide the urgent needs of the local market for various food and medical products, said Saudi Authority for Industrial Cities and Technology Zones (Modon) General Director Eng Khaled bin Mohamed Al Salem.

He said Modon has been providing ready-built factories ranging from 700 sq m to 1,500 sq m to entrepreneurs and SMEs operating in clean and light industries, such as food and medical industries, as well as electrical and electronic industries.

Eng Al Salem said the pandemic has led to a significant increase in the demand for food and medical products in the local market, noting that food industries topped the list of most activities using ready-built factories at 46%, followed by transformative industries, notably medical supplies such as medical tubes and masks, which ranked second at 14%, and pharmaceutical industries with 9% of total activities was in third place.

He stated that investing in ready-built factories contributes to strengthening the role of SMEs in the national economy and achieving food and medical security in line with the kingdom's Vision 2030, which aims to boost their contribution to the GDP to more than 35%. It is also in line with Modon’s strategy to empower the industry and contribute to increasing local content.

The last few years have witnessed heavy demand from local and international investors for ready-built factories due to the incentives and benefits that these offer, as well as the availability of financing solutions, which help shorten the time and effort and reduce the cost to the investor.

The financing solutions offered to Modon's investors include the “Factory and Loan” offered in cooperation with the Saudi Industrial Development Fund; and the OSOS scheme that allows the investor to get a ready-built factory and financing from Social Development Bank of up to SR4 million, accompanied by a set of incentives.

Eng Al Salem also highlighted that the ready-built factories take into consideration the provision of office space and open production halls equipped to install production lines, loading and unloading areas, private parking for each factory. The factories also come with the provision of electricity with appropriate loads, and offer service facilities such as toilets, water tanks, fire and sewage systems, as well as firefighting networks and emergency exit systems compliant with local and international occupational safety and security specifications accredited by Modon.

The Director General revealed that the number of ready-built factories in the industrial cities had increased to about 560, comprising 16 diversified activities, 15 of which are industrial and the remaining in the service sector, represented by laboratories and the like.

He added that Modon witnessed the inauguration of 78 new ready-built factories with areas of 1,500 sq m in 2020, including 9 in Riyadh’s Third Industrial City; 15 in Dammam’s Second Industrial City; 24 in Madinah’s Industrial City; 20 in Sudair Industrial and Business City, and 10 in Zulfi’s Industrial City. Moreover, 17 ready-built factories in Makkah’s Industrial City; 12 in Hail’s Industrial City, and 20 in Ahsa’s Waha Modon are ready for rental.

He also informed that a set of ready-built factories is scheduled to be launched this year to empower the industry, especially the promising sectors that currently occupy approximately 70% of the total leased units.

Since its inception in 2001, Modon's focus has remained on the development of industrial lands with integrated services, as a result of which it oversees today 35 existing and under development industrial cities in various regions of the kingdom, in addition to its supervision of private industrial complexes and cities. The developed industrial lands have exceeded 198.8 million sq m so far, and the existing industrial cities include more than 3,500 operational factories. – TradeArabia News Service

 

 

 

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