Khalid Al Salem, Director-General, Saudi Authority for Industrial Cities and Technology Zones (MODON): Interview

Khalid Al Salem, Director-General, Saudi Authority for Industrial Cities and Technology Zones (MODON)

Interview: Khalid Al Salem

In what ways are modern technologies such as artificial intelligence improving productivity within manufacturing plants and smart cities?

KHALID AL SALEM: Recently, MODON launched the National Productivity Programme as an initiative within the National Industrial Development and Logistics Programme, in partnership with the Saudi Industrial Development Fund and the King Abdulaziz City for Science and Technology. The aim is to help industrial companies with digital transformation and the adoption of technologies in the context of Industry 4.0. The programme seeks to help factories achieve the highest rates of production efficiency by creating plans to implement the techniques of the Fourth Industrial Revolution (4IR). Such plans will be created for 100 existing factories, selected to be an example for other manufacturers to transform and keep pace with the 4IR. The first phase of the programme began in April 2019, working with 20 factories in cooperation with GE, while the second phase will be launched of 40 more factories in 2020.

What are the key factors attracting international investors to the Kingdom’s industrial cities?

AL SALEM: By working within a defined strategy to make the most of the state’s partnerships with the private sector, the government is offering a number of incentives such as technical, fiscal or administrative procedures through its industrial cities. This strategy has already attracted leading international companies in the industrial field, in addition to value-added investments from both international and local companies. These include two factories for Germany’s Siemens, one to manufacture gas turbines and compressors, and the second for automation panels; an industrial plant for Egypt’s Pharco Pharmaceuticals; an oil and gas manufacturing site for GE; a pump workshop for Japanese firm Ebara; a manufacturing centre for France’s Schlumberger; and a chemical materials manufacturing site for Germany’s Henkel. As of March 2020 the volume of investment within MODON’s industrial cities was approximately SR367bn ($97.8bn).

How can local small and medium-sized enterprises (SMEs) be integrated into the Kingdom’s large-scale industrial projects?

AL SALEM: The Kingdom has made great strides in enhancing the participation of SMEs and their impact on the growth of the national economy by increasing their contribution to GDP and their role as an integral component of the private sector.

MODON has strengthened its strategy to help the industry increase its local content by developing a number of different products and financial solutions for integration with its partners in the public and private sectors. These solutions include industrial land with developed infrastructure and services; investment land dedicated to developing facilities and services within industrial cities; ready-made factories ranging from 700 sq metres to 1500 sq metres for partners investing in the SME sector; business incubators to support entrepreneurs and owners of new projects; and logistical solutions distributed in principal areas throughout the Kingdom.

In cooperation with the Saudi Industrial Development Fund, MODON provides Land and Loan products, whereby investors for industrial land and financing as part of a unified industrial package. It also has a Factory and Loan product, which is intended to provide ready-made factories to investors with the possibility of obtaining financing for a project. In addition, MODON provides a Foundations product that enables investors to obtain up to SR4m ($1.1m) in financing through the Social Development Bank. MODON also holds workshops and collaborates with the Small and Medium Enterprises General Authority to support local entrepreneurs and SMEs.

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The Report: Saudi Arabia 2020

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