JEDDAH: P.K. ABDUL GHAFOUR
Published — Wednesday 16 January 2013
Last update 15 January 2013 11:41 pm
Saudi and Turkish investors have reached an agreement to establish the Kingdom’s first factory to build trailers and containers at a cost of SR500 million.
The new factory to be established at Jeddah Industrial City will produce 5,000 trailers and containers this year, said Anwar Basaad, chairman of the board of directors of Reema Group.
“The agreement will help transfer of Turkish technology to Saudi Arabia,” he said, adding that there are good prospects for making trailers and containers in the Kingdom.
“We intend to meet the local demand for trailers and containers,” Basaad said. The factory will be established on an area of 20,000 square meters in the industrial city.
As per the agreement the Turkish side will train Saudis on operation and maintenance of the factory. “We have set out for this project considering the Kingdom’s political and economic stability,” he said.
“We have selected Turks for the project after conducting detailed studies,” Basaad said. The Turkish partner has achieved considerable experience in the field.
More than 160,000 heavy trucks operate in the Kingdom. Total investments in the Kingdom’s light, medium and heavy transport sector are estimated at more than SR80 billion.
The new move comes after the Kingdom began manufacturing Isuzu trucks in Dammam. Jaguar Land Rover of Tata Motors has signed a preliminary deal to build a plant in the Kingdom to make 50,000 Land Rovers a year.
The company plans to benefit from the upcoming multibillion integrated aluminum complex currently being built in Ras Al-Khair, north of Jubail. The $ 4 billion refinery and smelter plant is expected to produce the cheapest aluminum in the world.
The new assembly plant will be Tata Motor’s third largest assembly plant in the world, after the ones in the UK and China.
Saudi Arabia, which does not have an existing automotive industry, is seeking to develop local industry to diversify its economy away from oil exports, leveraging its abundant natural resources and low electricity prices.
The Isuzu plant in Dammam began assembling medium-duty trucks using parts supplied from the company's operations in Japan, Thailand, Indonesia and China.
Isuzu intends to manufacture some of the spare parts in the Kingdom. The present plant is making 600 units for the Saudi market. By the end of 2017, it will produce 25,000 light and heavy-duty trucks, 40 percent of them will be exported to countries in the region.
The Saudi Industrial Property Authority (Modon) said global car manufacturing companies are entering the Kingdom’s market, adding that their presence would create new opportunities for other industries. It will also create more job opportunities for Saudis and stimulate foreign investment.
Modon gives utmost importance to the automobile industry as it would contribute to transfer of international technology. These value-added projects should recur on the industrial sector in the Kingdom to open areas of employment and investment opportunities in complementary industries, it added.