Saudi Arabia Lures Supply Chain Investors With New $2B Initiative
With the push for supply chains resilience in top gear, Saudi Arabia is luring global corporations with the promise of better offshoring opportunities. On Sunday, Saudi Arabia’s Crown Prince Mohammed bin Salman launched the Global Supply Chain Resilience Initiative (GSRI), through which the country aims to attract investments in supply chains to and from the Kingdom.
The GSRI is designed to make Saudi Arabia a location of choice for global industrial companies looking to improve their business resilience. In addition, it will give investors access to the Kingdom’s resources, infrastructure and a guarantee for government support.
During the launch, Prince Mohammed bin Salman pledged $2 billion in incentives to supply chain investors. In return, Saudi Arabia hopes to attract an initial investment of $10 billion worth of projects in manufacturing and service industries.
“This will be instrumental, together with the already launched development initiatives, in enabling investors to develop sustainable supply chains reaching all parts of the world. Notably, it will bring the Kingdom closer to achieving its vision 2030 aspirations to be a top 15 global economy,” said bin Salman.
The GSRI is one of the initiatives under the Saudi Arabia’s National Investment Strategy, launched in October 2021, to turn the country into a global investment powerhouse.
As a precursor to a favorable investment environment, in July last year, the Kingdom also pledged an infrastructure fund of over $133 billion. The fund would go into improving the country’s airports, seaports, rail and roads within a decade.
Recently, the Saudi Ports Authority (Mawani) awarded two contracts worth $171 million to deepen and build new berths at the Jeddah Islamic Port. This is in addition to other contracts totaling to $240 million, issued back in September to establish a new integrated logistics park at the facility.
With Saudi Arabia seeking to become a global supplier of hydrogen, it is likely that this emerging industrial sector will become the fulcrum of the GSRI.
Specifically, Saudi Arabia is targeting clean hydrogen production of 2.9 million tons per year by 2030 and 4 million by 2035. The current focus is to gain a large market share in blue hydrogen, particularly in form of blue ammonia produced using carbon capture, utilization, and storage (CCUS).