Bandar Alkhorayef, Minister of Industry and Mineral Resources: Interview

Bandar Alkhorayef, Minister of Industry and Mineral Resources

Interview: Bandar Alkhorayef

How can advanced technologies facilitate the development of high-value-added industries?

BANDAR ALKHORAYEF: A healthy local manufacturing industry is important for the economy, as it has large economic multipliers and drives other value-added sectors. The digital transformation is shifting the centre of competition in manufacturing from cost reduction to innovation and intellectual contribution, and we believe this will enhance the value of domestic manufacturing output and make the sector more sustainable in high-wage economies. Digital transformation technologies such as the internet of things, robotics, artificial intelligence and 3D printing are disrupting the manufacturing industry across the board, creating new operational models for existing factories and introducing new business opportunities for technology leaders, companies and entrepreneurs. Accordingly, factories are becoming more efficient, more reliable, safer and greener with better market responses and product customisation capabilities. Amid the current technological disruption, we believe that we have all the components to position the Kingdom as a global leader in industrial digital transformation. One of the Kingdom’s key agents in this regard is its young and tech-savvy population. Moreover, the country’s advanced communications and digital infrastructure is designed to be able to quickly deploy new solutions, while the Kingdom has strong financial capabilities to fund this transformation and provide the right incentives.

Despite a recent increase in tariffs, to what extent can industrial investors benefit from relatively low operational costs in Saudi Arabia?

ALKHORAYEF: Our industrial water and power tariffs remain competitive compared to other countries, and the Kingdom will continue to ensure that its energy prices are a competitive driver for investment in the future. There are several other value propositions that provide operational cost advantages to industrial investors, such as the availability of basic and intermediate raw materials; access to qualified human capital and research capabilities; export advantages through a number of trade agreements; access to industrial land and high-quality services at competitive prices; and access to competitive financing through the Saudi Industrial Development Fund and EXIM Bank.

The National Industrial Development and Logistics Programme (NIDLP) is one of Vision 2030’s 13 Vision Realisation Programmes and was launched to support the integration of industrialisation efforts across multiple sectors, as well as implement and monitor value proposition efforts and other key enablers like special economic zones, advanced logistics networks and Industry 4.0 technologies.

In what ways will the new mining law benefit investors and the Kingdom’s long-term economic goals?

ALKHORAYEF: The mining and mineral sector is basically untapped, and Vision 2030 is laying the foundation for the sector to pick up and contribute to diversification targets. Linking mining with industry under one ministry is a demonstration of the Kingdom’s intention to develop the downstream industries related to mining and minerals. The most important element is indeed the new mining law of 2020. It has considered best practices and benchmarked leading mining countries to learn from their experiences. While creating the new law, we also considered different policies and licensing processes that are investor friendly, but also take into account the environment and the long-term contribution to the sector. The government is also investing in a sizeable geological survey to provide investors with access to geological information and databases that will help them make investment decisions with clarity and reduced risk. It is our intention to develop the mining sector in accordance with industry standards, and we plan to communicate effectively with potential investors while also promoting existing capabilities.

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