Skip Ribbon Commands
Skip to main content

 Industrial Development in Saudi Arabia



Although industrialization is relatively recent, in Saudi Arabia, it has witnessed a steady development, during which distinguished accomplishments were achieved. These are attributed to the importance of the industrial sector and the support it receives from the government owing to its role in achieving strategic and economic goals of the country. The efforts exerted by the government for the support of industrial development covered several basic spheres including implementation of required infrastructure, construction of Jubail and Yanbu industrial cities, construction of industrial cities in various regions of the Kingdom, establishment of Saudi Industrial Development Fund (SIDF), and continued provision of other industrial support and incentives. The response and cooperation of the private sector with the governmental plans and efforts have an effective impact on actualization of the industrial development's achievements. In the following, we review, in brief, some of the industrial progress indicators in Saudi Arabia over the past years.


(1)         Progress in Number of Factories, Total Finances and Number of Employees

The government has attached great importance to industrial development by providing all kinds of supports and facilities to the industrial sector. As a result, the Saudi industry has made significant progress that was clearly manifested in the growth of industrial investment since the establishment of Saudi Industrial Development Fund (SIDF). The following table illustrates the progress in the number of producing factories and volume of their investments and the number of employees between 1974 and 2015, broken down by major sectors. 

As indicated in the table, the industrial base in the Kingdom has experienced a wide expansion over the past four decades. The number of operating industrial units has increased from (198) in 1974 to (7007) in 2015. Parallelly, invested capital has increased from nearly SR 12 billion in 1974 to more than SR 1.1 Trillion in 2015. At the same time, number of employees has increased from (34) thousand in 1974 to (990) thousand in 2015.

Looking into  the sectoral composition of  the operating industrial units in the Kingdom at the end of 2015, we note that the Other Non-Metallic Minerals Sector is heading all other sectors in terms of operating industrial units (1,467) representing 21% of total operating ones.  Manufacture of Chemicals & its Products Sector occupied the leading position among the other industrial sectors in terms of  total finances (SR 569 billion) representing 52% of total finances of operating factories, followed by Manufacture of coke & refined petroleum products Sector with SR 115 billion representing 11% of total investment of operating factories. The Food and Beverages Sector headed all other Sectors in terms of the number of employees (195) thousand representing 20% of total employment in the operating factories.


     Operating Industrial Units by Number, Total Finances and Employees 1974 – 2015

Industrial ActivityFactory No.
Total Finance
(SR Million)
Manpower No.
1974201519742015 19742015
Manufacture of food products and beverages399402,02888,7197,199195,258
Manufacture of textiles184206.2606016,701
Manufacture of wearing apparels298381,10124913,076
Manufacture of leather & related products2317543502,920

Manufacture of wood and of products of wood and cork,

except furniture; manufacture of articles of straw and

plaiting materials

Manufacture of paper and paper products923117712,72084336,203
Printing & reproduction of recorded media18498092,7552,5946,032
Manufacture of coke & refined petroleum products 4141364115,3183,48720,750
Manufacture of chemicals & its products96612,954569,2612,42987,880
Manufacture of basic pharmaceutical products and pharmaceutical preparations-36-4.932-10,245
Manufacture of rubber and plastics products1193152226,7701,89590,858
Manufacture of other non-metallic mineral products251,4673,77196,9703,780184,198
Manufacture of basic metals2431023471,4962,80171,383

Manufacture of fabricated metal products,

except machinery and equipment

Manufacture of computer, electronic and optical products25112,6883310,161
Manufacture of electrical equipment221512714,29846437,556
Manufacture of machinery and equipment n.e.c.1220880827,0584,35729,529
Manufacture of motor vehicles, trailers and semi-trailers8145783,34162216,407
Manufacture of other transport equipment-10-26101,687
Manufacture of furniture172921703,1061,29525,946
Other manufacturing -74030,345014,013
Repair and installation of machinery and equipment-3065603,501

Source: Operational Industrial Projects System (OIPS).


Providing modern industrial cities is an additional form of support by the government for the national industries. The Kingdom, has constructed and developed several industrial cities in the various regions of the Kingdom and provided them with all required services and utilities. To upgrade the quality of services provided by the industrial cities, the Saudi Industrial Property Authority (Modon) was established in 2001, as an independent public agency to supervise the establishment and management of industrial cities and technology zones, in addition to the operation, maintenance and development of these cities in collaboration with the private sector.


(2)         Progress in Industrial Production:

Production of the manufacturing industries in the Kingdom has witnessed a steady progress over the past years. As shown by the figure below, total GDP (in constant prices) achieved by the manufacturing industries increased from the level of SR 32 billion in 1974 to more than SR 296 billion at the end of 2015. Also, the growth rate of the manufacturing industries continued to increase throughout this period at an average of 5.6% per annum, which is considered one of the highest among the other economic sectors. Owing to the substantial growth achieved by the manufacturing industries during this period, the contribution of the sector in the country's GDP has increased from 3% in 1974 to 12% at the end of 2015. Parallelly, the contribution of the manufacturing industries sector in the non-oil GDP increased from 15% in 1974 to 21% in 2015. These rates show the success of the development plans in pushing forward the industrial progress and the fruitful cooperation these plans received from the private sector.


A more important aspect in the development of the manufacturing industries in the Kingdom is indicated by the change that occurred in the sectoral composition of the Saudi manufacturing over the past period, as the share of the manufacturing industries (other than oil refining) in manufacturing GDP increased from 32% in 1974 (at constant prices) until it reached 72% by the end of 2015. This trend reflects the dynamism of the Saudi manufacturing industries sector (other than oil refining). In this regard, we refer in particular to the substantial progress and expansion experienced by the petrochemical industries in the Kingdom over the last two decades under the auspices of SABIC.

The Statistics and analysis made by SIDF show that the GDP's mix for the manufacturing industries sector, (excluding oil refining) has been a subject of a substantial growth throughout the past two decades. Since the early nineties, the Chemical Products Sector has been occupying the leading position of GDP's mix of manufacturing industries, (excluding oil refining). Other sectors that have been showing a notable growth include: Machinery and Equipment, Building Material Products, and Food Products. At present, these four sectors contribute the major part of the Saudi manufacturing industries' GDP.



(3)         Progress in Industrial Exports:

The Kingdom has devoted a great attention to the development of industrial exports, in accordance with the government's comprehensive economic development strategies aiming at expansion of production base and diversification of income sources. Despite the relative recentness of industry in Saudi Arabia, particularly the experience of private sector in the field of exports, Saudi industrial exports have achieved wide steps in this area. The Chemical Industries have scored a great success in penetrating international markets, and gave a positive image of the Saudi products in terms of quality and price. The table below shows the progress made in values and contributions of Saudi industrial exports during the period from 1995 to 2015.


Progress in Saudi Industrial Exports: 1995 – 2015


Industrial Exports (SR' Million)

% of Total Exports

% of Non-Oil GDP


 Source:  General Authority for Statistics.



The previous table shows that Saudi industrial exports achieved a rapid growth rate over the past years. Value of these exports showed an annual growth rate of 10% during 1995-2015, increasing from about SR 22,558 million in 1995 to about SR 156,423 million in 2015. The significant increase in the industrial exports in 2003 and 2005 could be referred to the implementation of the GCC's unified customs union, and the Kingdom's accession to the World Trade Organization (WTO), respectively. As for the industrial exports ratio to KSA's non-oil GDP, it increased from 6.6% in 1995 to 8.9% in 2015, indicating the importance of exports as a factor of industrial development.

With regard to the structure of the Saudi industrial exports, the following figure shows the chemical and plastic exports and other exports during 1995-2015.



The above figure shows that the chemical and plastic exports represent more than two thirds of the total Saudi industrial exports. These exports have witnessed a rapid growth rate as their value rose from SR 15,621 million in 1995 to about SR 16,698 million in 1997. However, the value of these exports declined to a level of SR 12,718 million in 1999, due to a drop in oil prices. Then, it surged substantially after the development of the oil market and reached SR 115,235 million in the year 2015.

The other exports (non-chemical and plastic) have also enjoyed a significant growth rate during 1995-2015, jumping from about SR 6,937 million in 1995 to 41,188 million in 2015. The following table reflects a detailed picture of the Saudi industrial exports performance during 1995-2015. In addition to the chemicals and plastic sector, as shown in the same table, other exporting sectors include Foodstuffs, Base Metals & Articles of Base Metals, and Electrical Machines, Equipment & Tools. It is worth noting that most of these sectors' exports achieved high export growth rates.

Saudi Industrial Exports by Major Sectors: 1995 – 2015

SectorValue of Exports
(SR Million)
Annual Growth(%) 
199520151995 - 2015
Foodstuffs 1,58913,61112%
Chemical & Plastic Products15,621115,23511.1%
Base Metals & Articles of Base Metals 2,63113,8459.1%
Electrical Machines, Equipment & Tools 8513,5737.8%
Other Exports1,86610,1599.3%
Total 22,558 156,423 11%

  Source:  General Authority for Statistics.