Saudi Arabia is set to build three steel plants worth $9.3 billion. With this measure, the Kingdom aims to develop its industrial sector and thus reduce the need to import iron and steel from abroad.
According to the Minister of Industry and Mineral Resources, Bandar Al Khorayef, the projects will have a combined production capacity of more than 6 million tonnes.
One of them will be an integrated iron sheet production complex, which, according to the Saudi Press Agency (SPA), will achieve an output of 1.2 million tonnes per year, focusing on shipbuilding, pipelines, platforms and huge oil depots.
Another project is still in negotiations with potential international investors, but the idea is to reach an agreement to create a major integrated surface iron production complex with an annual capacity of 4 million tonnes of hot-rolled iron, 1 million tonnes of cold-rolled iron and 200,000 tonnes of tin-plated iron.
It is intended to meet demand from the automotive, food packaging, household appliances and water pipes sectors, according to SPA.
The last of the projects will involve the creation of a factory for the production of circular iron blocks that will reach 1 million tonnes per year, with the aim of promoting the production of seamless iron pipes, mainly used in the oil and gas industry.
These initiatives demonstrate why Saudi Arabia is the largest economy in the Arab world; a country that is expanding its industrial, mining and manufacturing sectors as part of the Kingdom's Vision 2030 strategy to reduce its dependence on oil and diversify its economy.
The plan is already bearing fruit: according to the General Statistics Authority (Gasat), Saudi Arabia's industrial production index (IPI) rose by 17.7% this July compared to the same month last year.
"This increase can be attributed to the rise in mining, quarrying, manufacturing and electricity and gas supply," he said.
In addition, the Kingdom is currently engaged in a national plan with more than 40 recommendations aimed at structuring the iron and steel sector. These include the review and approval of sixteen policies and legislations, as well as the creation of an iron academy and a research and development centre.
"This will help us face and address global and local changes to ensure the sustainability and resilience of the sector in the face of economic and geopolitical variables," said Minister Al Khorayef.
Saudi Arabia aims to activate local production of all types of steel products, exploiting iron, steel and even tinplate, to boost sectors such as energy, automobiles and the food industry.
The Kingdom has already begun to attract international manufacturers with the intention of establishing a solid production base in the country. In early 2022, Lucid Group, an automaker backed by Saudi Arabia's Public Investment Fund, said it would begin construction of its first major international manufacturing facility in the Kingdom in the first half of this year.
Lucid is a major US-listed company that has already signed agreements with the Saudi Arabian Ministry of Investment, the Saudi Arabian Industrial Development Fund and the King Abdullah Economic City in order to build such a factory.
In April, Saudi Arabian Military Industries also signed an agreement with Boeing to develop a joint venture to localise manufacturing in the Kingdom and create more jobs in the country.
This further demonstrates Saudi Arabia's commitment to building a strong and diversified economic system that is less and less dependent on oil.