Skip Ribbon Commands
Skip to main content

 Industrial Development in Saudi Arabia




Saudi industrial sector has witnessed a steady development with plenty of outstanding achievements. This is due to the great support given by the Saudi Government to this sector as it plays an important role in achieving the strategic and economic objectives of the Kingdom. The efforts to support the industrial development are based on several main pillars including creation of required infrastructure, establishment of Jubail and Yanbu and other industrial cities all over the Kingdom, establishment of the Saudi Industrial Development Fund, and offering of industrial incentives. The private sector's cooperation with the government plans and efforts made an effective impact on the industrial development achievements. The following information illustrates some of the Kingdom's industrial development indicators in the past:


(1) Increase in number of active factories and workers and volume of their investments:

The government has devoted great attention to industrial development as can be seen in its support and encouragement. As a result, Saudi industry has made a quantum leap particularly in industrial investments after the establishment of the Saudi Industrial Development Fund. The table below illustrates the growing number of active factories, investments and workers from 1974 to 2016, categorized by major industrial fields.


The industry in the Kingdom, as shown in the table below, has expanded significantly over the last four decades. The number of active factories increased from 206 in 1974 to 7,741 in 2016. Invested capital has also increased from SR 4.3 billion in 1974 to SR 1.1 trillion in 2016. The number of workers increased from nearly 10,000 in 1974 to more than one million workers in 2016.


In view of the sectoral structure of active factories in the Kingdom by the end of 2016, the non-metallic mineral products sector ranks first with 1,623 factories representing 21% of the total active factories. In terms of investment volume, the chemical and plastic sector ranks first with SR 532 billion representing 50% of total investments. The coke and refined petroleum sector comes second with approximately SR 123 billion (12%). In terms of the number of workers, the non-metallic mineral sector topped all activities with 198,000 workers representing 19% of total workforce in active factories.


Number of Factories, workers and total financing.

Industrial ActivityFactory No.
Total Finance
(SR Million)
Manpower No.
1974201619742016 19742016
Food products 151.311 122 58.922 73.4 790 23
Beverages 51.534 208 27.149 59.7 224 17
Textiles 17.882 0 6.917 0.0 97 1
Clothing 14.754 187 1.238 3.9 114 4
Leather and related products 2.602 9 526.8 0.6 32 1
Wood and products of wood and cork, excluding furniture. Certain types of thatching and plaiting materials 7.432 175 1.296 43.8 92 4
Paper and paper products 35.684 846 13.372 153.4 254 12
Printing and reproduction of recorded media 5.827 18 2.642 56.0 43 9
Coal coke and refined petroleum products 23.866 3202 123.278 300.0 150 2
Chemicals and chemical products 93.022 1578 532.430 1804.1 738 12
Basic pharmaceutical products and pharmaceuticals 9.714 - 5.239 - 40 -
Rubber and plastic products 95.083 522 26.767 107.4 1.030 9
Other non-metallic mineral products 198.095 1813 102.227 1499.3 1.623 24
Base metals 69.567 29 74.187 3.6 333 2
Preformed metal products, excluding Machinery and Equipment 118.331 600 23.927 133.0 1.097 32
Personal Computers, electronic and visual products 10.185 217 2.931 27.8 52 3
Electrical Equipment 39.984 40 18.321 2.4 232 7
Machinery and Equipment not classified elsewhere 35.785 5 36.783 9.1 224 9
Manufacture of motor vehicles and trailer vehicles and semi-trailers 14.132 25 2.893 6.3 153 7
Vehicles with engines, trailers or semi-trailers 4.663 0 1.052 0.1 10 1
Furniture 26.357 509 3.132 39.4 323 22
Other transforming industries 11.894 91 1.937 24.5 74 4
Repair and installation of Machinery and Equipment 141 13 10.9 0.2 3 1
Total 1,0371,845 10.209 1.067.185 4.348 7.741 206

Source: Ministry of Energy, Industry and Mineral Resources


(2) Industrial Production Development

The Kingdom's industrial production has grown significantly over the last period. Transforming industries GDP at constant prices, as shown in the diagram below, increased from SR 32 billion in 1974 to SR 310 billion by the end of 2016. The industrial sector growth rate continued to rise throughout this period. Transforming industries GDP's average annual growth during this period was about 5.6%, as one of the highest growth rates and most sustainable among other industrial sectors. Due to the significant development of transforming industries during this period, the sector's GDP share has increased from 3% in 1974 to 12% by the end of 2016. The contribution of the transforming industries sector in non-oil GDP has increased from 15% in 1974 to 22% in 2016. These percentages are indications to how successful the development plans are in pushing the industrial development, and to the pioneering role played by the industrial development Bodies led by the Saudi Industrial Development Fund, and the fruitful cooperation that these plans have received from the private sector.

 Source: General Authority for Statistics

The major transformation of the industrial sector's production structure during the last period is an important development indicator. As the transforming industries share (non-oil refining) increased from 32% of the industrial sector's GDP (constant prices) in 1974 To 69% by the end of 2016. This is a clear indicator of how this sector thrived, specially, the significant development and expansion of petrochemical industries in the Kingdom over the past two decades led by SABIC.

The Fund data and analysis show that the GDP of the transforming industries sector (non-oil refining) structure has developed significantly over the last two decades. Since the beginning of the 1990s, the Chemical products sector has been at the forefront of the GDP of the transforming industries sector (non-oil refining) structure. Sectors like Machinery and Equipment industry, Construction products, and Food products have witnessed significant development. Nowadays, these four sectors are the main contributors to the GDP of the Saudi transforming industry.

(3) Non-oil Industrial Exports Development:

The Kingdom has given great importance to the development of industrial exports in line with the Kingdom's comprehensive economic development strategies in expanding the production base and diversifying sources of income. Despite the relative novelty of the Saudi private sector's export experience, Saudi industrial exports have made significant improvement in this area. The Saudi petrochemical exports are the first to enter international markets and give positive image to Saudi products in terms of quality and price. The following table shows the contribution of Saudi industrial exports and development of prices from 1995 to 2016.


Non-oil Industrial Exports Development 1995 to 2016


Industrial Exports (SR' Million)

% of Total Exports

% of Non-Oil GDP


 Source:  General Authority for Statistics.




The table above shows a rapid growth in Saudi industrial exports over the last years by 9.3% a year from 1995 to 2016. The value of these exports increased from SR 22,558 million in 1995 to SR 145,911 million in 2016. It is interesting to note that the significant increase in the value of industrial exports in 2003 came after applying the GCC Customs Union regulations and in 2005 with the accession of the Kingdom to the World Trade Organization. The percentage of Saudi industrial exports contribution to non-oil GDP has increased from 6.6% in 1995 to 8.1% in 2016. This confirms the importance of exports as one of the most important factors of industrial development.

The following chart shows the exports of chemical and plastic products and other commodities from 1995 to 2016.



The chart above illustrates that exports of chemical and plastic products represents more than two thirds of the Saudi exports total. The value of these exports increased steadily from SR 15,621 million in 1995 to SR 16,698 million in 1997. In 1998 and 1999 exports value was affected by the decline in oil prices. Their value dropped down to SR 12,718 million in 1999, but it grew stronger than before with the improvement of oil markets to SR 104,519 million in 2016.

As for other industrial exports (other than chemical and plastic products), they also witnessed remarkable growth from 1995 to 2016, rising from SR 6,937 million in 1995 to SR 41,392 million in 2016.