Why Global Manufacturers Are Racing to Set Up Operations in Saudi Arabia
Manufacturing remains a cornerstone of national growth, driving the National Logistics and Industrial Development Program (NIDLP) sectors to a staggering $262 billion GDP contribution in 2024.
This milestone marks a clear inflection point: Saudi Arabia is no longer viewed merely as a competitive regional market, but as a high-growth destination for industrial capital and a strategic manufacturing base at the heart of global supply chains.
Drawn by world-class infrastructure and investor-friendly reforms, international manufacturers are rapidly expanding their footprints to leverage the Kingdom’s position as one of the world’s fastest-growing industrial and export hubs.
The Bigger Picture: What Distinguishes Saudi Arabia?
Saudi Arabia’s industrial strategy reflects a decisive shift toward localized, private-sector-led manufacturing as a cornerstone of long-term economic sustainability. At the heart of this transformation are Vision 2030 and initiatives such as the “Made in Saudi” program, which aims to position the Kingdom as a regional and global industrial powerhouse.
Adopting this approach helps Saudi Arabia achieve its Vision 2030 goals:
- Reducing reliance on imports
- Boosting industrial exports to SAR 557 billion
- Tripling manufacturing’s GDP contribution to SAR 895 billion
- Doubling sector employment to 2.1 million jobs
Beyond scale, Saudi Arabia is deliberately promoting manufacturing as a technology-driven, high-value industry, attracting long-term capital commitment.
Building on this foundation, the Kingdom is now deploying targeted incentives to draw in more private capital—most recently evidenced by the launch of the Standard Incentives Program, which provides SAR 10 billion to catalyze investment across the industrial sector.
Manufacturers are no longer asking whether to enter Saudi Arabia. The focus has shifted to how to build, automate, and integrate operations into the Kingdom’s evolving industrial ecosystem.
Case in point: Acme, a leading industrial technology company with over a century of experience, aptly exemplifies this shift. Serving sectors including retail, e-commerce, FMCG, food & beverage, and pharmaceuticals, Acme operates a major manufacturing hub in Jebel Ali Free Zone, while Saudi Arabia has become a cornerstone of its regional growth strategy.
After supporting Saudi-based clients from the UAE for over a decade, Acme has significantly expanded its presence within the Kingdom with the help of AstroLabs. According to CEO Navin Narayan, the company has completed more than ten major factory and warehouse automation projects in Saudi Arabia—reflecting growing demand for advanced industrial solutions.
High-Growth Manufacturing Sectors Driving the Next Wave of Industrial Expansion
1. Renewable Energy Manufacturing
Saudi presses ahead with its move towards a sustainable energy future, and its renewable energy sector faces a pivotal juncture, aiming to localize 75% of renewable energy components by 2030. For international firms, the opportunity extends beyond market access—it includes technology transfer partnerships, access to abundant sources of clean energy, and participation in various incentive programs such as the SAR 1 billion Green Financing Initiative.
Back in 2024, the Public Investment Fund (PIF) entered into two solar PV manufacturing partnerships with Chinese firms JinkoSolar and TCL Zhonghuan Renewable Energy. Structured as joint ventures, the projects will establish a combined 30 GW of solar PV manufacturing capacity in the Kingdom, spanning the full value chain from ingots to modules.
Following on from that, the year 2025 also saw several global companies expanding operations in Saudi Arabia.
Chinese manufacturer SoleFiori announced it is establishing a 6 GW heterojunction (HJT) solar module factory optimized for desert conditions. Meanwhile, TrinaTracker has opened a 3 GW smart solar tracker manufacturing plant in Jeddah's 3rd Industrial City. US manufacturer GameChange Solar has also announced the expansion of its manufacturing facility in Saudi Arabia to 6 gigawatts (GW) annually.
Beyond solar, Saudi has ambitions to be a global producer and exporter of hydrogen through partnerships with global players. It has recently established an electrolyzer manufacturing joint venture with HyGreen Energy. Moreover, ACWA Power is currently exploring green hydrogen supply chain development with Italy's Snam.
2. Automotive and Electric Vehicles
With a strong manufacturing base and increasing demand, Saudi Arabia has set its sights on becoming a key player in the global automotive industry, with aspirations to produce over 350,000 passenger vehicles annually by 2030.
Within this industry, the electric vehicle (EV) revolution is a key sector of focus, with the government pushing for cleaner and sustainable mobility solutions backed by goals like converting 30% of all cars in Riyadh to electric power.
Global manufacturers like Lucid Motors are among those capitalizing on this momentum. Looking back at 2023, the company made history in September when Lucid Motors opened the first-ever car manufacturing facility in King Abdullah Economic City (KAEC), with an initial capacity of 5,000 vehicles annually.
Another leading OEM with expanding operations in Saudi Arabia is Hyundai Motor Manufacturing Middle East, boasting a facility capable of producing 50,000 vehicles annually, including electric models, by Q4 2026.
In the EV space, perhaps the launch of CEER, the Kingdom's first EV brand, exemplifies ambitions to localize EV production. CEER will begin production in 2026 with eventual capacity for 240,000 vehicles per year.
The sector's rapid growth is supported by continued investments in infrastructure development, including strategic partnerships, such as a $2.2 billion deal between CEER and Hyundai Transys for EV drive systems. The strategic goal to develop world-class EV infrastructure led to the establishment of the Electric Vehicle Infrastructure Company (EVIQ), which set up over 5,000 chargers across more than 1,000 stations by 2030.
A crucial aspect of the Kingdom's automotive manufacturing push is the indigenization of the supply chain. Primary developments in this regard also include the establishment of the King Salman Automotive Cluster, creating major entry points for battery manufacturers and component suppliers.
3. Pharmaceuticals and Biotechnology
The growth of the Kingdom's pharmaceutical and biotech sector is expected to continue through 2030, driven by the National Biotechnology Strategy aiming to transform Saudi Arabia into a global epicenter by 2040. Illustrating the impact, the number of pharmaceutical and medical device factories in Saudi Arabia has reached 206, with investments totaling SR10 billion ($2.6 billion).
Key drivers are substantial governmental investments and technology transfer partnerships. One example of these investments is the launch of the PIF-led Lifera, a commercial-scale CDMO to boost local biopharmaceutical production and establish the Kingdom as a worldwide pharmaceutical manufacturing hub.
Major global pharmaceutical firms are establishing a significant presence in Saudi Arabia; in 2017, Pfizer inaugurated a $50 million manufacturing site.
Most recently, Julphar secured industrial land in Jeddah for a SAR 300 million pharmaceutical facility. Moreover, Sudair Pharma is developing a new insulin plant.
Even more remarkably, leading manufacturers are not just seeking market entry but embedding themselves in local industrial ecosystems by doubling down on partnerships to build sustainable and resilient supply chains. Avalon Pharma demonstrates this trajectory.
Avalon has recently signed a two-year memorandum of understanding (MoU) with Benta SAS for a partnership aimed at localizing strategic and innovative products in Saudi Arabia. The company also announced its plans to invest over SAR 100 million in building new manufacturing plants by 2030, as part of its efforts to double sales.
Aside from pharma, biotech manufacturing is recognized as a critical component of Saudi Arabia's expanding healthcare economy as well as a crucial draw for foreign investments. In 2021, Merck said it is doubling down on its presence to aid Saudi Arabia's effort to build biologics manufacturing operations.
In 2024, Gypto Pharma and Roche completed the first phase of transferring biotechnology and manufacturing for a biologic drug to treat liver cancer using Swiss technology.
4. Food and Beverage Manufacturing
With booming tourism, a growing population, and increased focus on food security, economic diversification, and industrial self-sufficiency, the F&B sector offers significant opportunities for manufacturers.
The Kingdom is committing to attracting $20 billion in food industry investments by 2035, highlighting significant room for growth. It has also established dedicated hubs for food industries, including the Jeddah Food Cluster, which is projected to contribute SAR8 billion to national exports and add SAR7 billion to the GDP. This Cluster is considered the world’s largest food manufacturing hub.
The sector's upward trajectory has led leading multinational companies to pick Saudi as an important market of focus.
For example, Nestlé is investing $1.86 billion over the next decade to establish manufacturing facilities and R&D centers, while PepsiCo opened its regional headquarters in Riyadh's King Abdullah Financial District, having invested $2.5 billion in the Kingdom over the past decade.
To reach its full potential, the sector is undergoing rapid technological transformation, with manufacturers adopting AI-driven automation, robotics, and smart supply chain systems.
With Saudi eying high rates of food self-sufficiency and the government targeting 30% growth in local food production, along with the 40% local content requirement for public contracts, the Kingdom offers international F&B companies not just market access to its 35 million consumers but also a strategic manufacturing base for serving the broader GCC region and beyond.
5. Mining and Mineral Processing
Since 2020, mining exploration spending has experienced a staggering 500% surge as the Kingdom aggressively unlocks an estimated $2.5 trillion in untapped mineral wealth.
As a result, annual spending on exploration has increased by 32%, far above the global average of 6-8%.
Mining has been established as the "third pillar" of the national economy, specifically intended to provide the raw materials required for advanced domestic manufacturing.
In pursuit of strong local mining activity, Saudi has implemented sweeping regulatory reforms through its New Mining Investment Law, which slashed the mining tax rate from 45% to 20% and allows 100% foreign ownership. Additionally, under the Mining Investment Law, the Kingdom presents a myriad of incentives, including financing up to 75% of capital costs through the Saudi Industrial Development Fund (SIDF).
Global interest in Saudi's mining sector is already skyrocketing. The number of active exploration companies has rocketed from just 6 in 2020 to 226 in 2024, with foreign investors now accounting for 66% of total mining investment and winning licenses issued in 2025.
Major international players—including India's Vedanta, China's Zijin Mining, and Australia's Hancock Prospecting consortium—have secured exploration permits for mineralized belts rich in gold, silver, copper, and zinc.
State champions Ma'aden and the Public Investment Fund's Manara Minerals are spearheading strategic global acquisitions. The latter has acquired a 10% stake in Brazil's Vale Base Metals.
Saudi Arabia's growing economic corridors have an accelerator effect, with strategic partnerships with the US, France, the UK, and African nations positioning the Kingdom as a critical alternative supplier of minerals essential for EVs, renewable energy, and an advanced manufacturing hub.
The mining sector's growth is crucial for the Saudi economy in the next decade. By 2030, if properly explored, this mining industry will contribute $70-80 billion to the GDP while creating over 250,000 jobs and attracting global companies to prioritize Saudi as a key expansion destination.
For investors looking to tap into Saudi Arabia’s industrial growth trajectory, the decision to establish a presence in the Kingdom has become increasingly urgent. Contact us to get started on your business setup journey.