Saudi Arabia Industry

A continued scaling back on energy, feedstock and utilities subsidies is likely to impact earnings in Saudi Arabia’s industrial sector, potentially reducing its long-held competitive edge. 

Falling demand and rising competition for feedstock, alongside a national push to bring the price of raw materials closer to market rates, are combining to put pressure on Saudi Arabia’s petrochemicals industry.

The first wave of state-backed solar power stations in Saudi were recently unveiled as part of a much larger commitment to diversify the Kingdom’s electricity generation capacity. 

A new phosphate mining and processing mega-project is set to improve Saudi Arabia’s access to the global fertiliser market, but a potential excess of international supply may extend the period before the multi-billion scheme turns a profit.

Rising competition and the threat of higher costs at home could see Saudi Arabia’s petrochemicals industry come under increased pressure. However, these impending challenges have so far failed to slow the progress of new projects being rolled out across the Kingdom.

Plans to roll out full car production in Saudi Arabia, part of a broader programme to expand the kingdom’s industrial base, appear set to pick up a gear, with one of the world’s best known marques moving to establish a local manufacturing facility at a time when sales of imported vehicles are rising.