Pandemic proves value of ready-built factories in supporting local content: Eng. Al Salem

Hind Al Soulia - Riyadh - RIYADH — Eng. Khaled Bin Mohamed Al Salem, general director of Saudi Authority for Industrial Cities and Technology Zones (MODON), suggests that the novel coronavirus (COVID-19) crisis has revealed the great importance of ready-built factories in mitigating the effects of the pandemic on the national economy, through its contribution in providing the needs of the local market for various food and medical products.

Eng. Al Salem said that MODON has been providing ready-built factories featuring areas ranging from 700 sqm to 1,500 sqm to its entrepreneurs and SME partners operating in clean and light industries, such as food and medical industries, as well as electrical and electronic industries.

He added that the pandemic 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%, and in line with MODON’s strategy to empower the industry and contribute to increasing local content.

He noted that the last few years have witnessed heavy demand from local and international investors for ready-built factories products 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 many financing solutions offered to MODON's investors include the “Factory and Loan” product in cooperation with the Saudi Industrial Development Fund (SIDF) to provide a ready-built factory and a financing for the project, and the "OSOS" product that allows the investor to get a ready-built factory and financing from Social Development Bank (SDB) of up to SR4 million, accompanied by a set of incentives.

Eng. Al Salem also highlighted the unique capabilities and designs that help in developing and continuing a new business, as ready-built factories take into consideration the provision of office space and open production halls equipped to install production lines with different models and areas ranging from 450 sqm to 900 sqm, 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.

Eng. Al Salem also revealed that the number of ready-built factories in the industrial cities increased to about 560, comprising 16 diversified activities, 15 of which are industrial and the remaining is in the service sector, represented in laboratories and the like.

He added that MODON witnessed the inauguration of 78 new ready-built factories with areas of 1,500 sqm 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 added to the previously inaugurated; 17 ready-built factories in Makkah’s Industrial City, 12 in Hail’s Industrial City, and 20 in Ahsa’s Waha MODON, which are all 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.

Further, Eng. Al Salem shed light on some successful examples of local and international investments in ready-built factories, such as Emerson Climate Technologies Arabia Ltd. for the production of condensing units and control panels, as well as electrical distribution in Dammam's second industrial city; and Advance Medical's plant for the production of sterile medical tubes in the third industrial city in Riyadh; and the Methods of Industry Electricity factory to produce electrical switches and connections in the industrial city of Al-Kharj.

He also cited Arabian Terra Co., Ltd. for the manufacture of well-drilling rigs and metal spare parts; "manufacturing and renovation" in the second industrial city of Dammam; and Shahia Food Limited Company "Dunkin Donut" for the production of coffee, sweets, sandwiches, drinks and donuts in the second industrial city of Dammam.

Meanwhile, the second industrial city of Riyadh hosts a ready-built factory for Camel Step Factory for Food Industries to produce roasted and ground coffee, as well as Bayar Saudi Arabia Ltd. for roasted nuts and spices.

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 sqm so far, and the existing industrial cities include more than 3,500 operational factories. — SG