JEDDAH, 17 July — Saudi Arabia’s first plant for producing car air conditioners was opened in south Jeddah yesterday.
The plant, which marks a milestone in overseas investment accompanied by transfer of technology, is the product of a joint venture between Abdul Latif Jameel Co. Ltd., the Kingdom’s sole distributor of Toyota and Lexus, and Japan’s Denso Corporation, which is a world leading company for car air conditioners.
The plant, which aims at producing about 20,000 air conditioners annually for Toyota Hilux to begin with, is established by the joint venture company — Denso Abdul Latif Jameel Co. Ltd. established in April 2001 with a capital of $2 million. The two companies own 50 percent share of the new company each and are managing it jointly.
Attending the inauguration were Fuhaid F. Al-Sharif, deputy governor for investor services at Saudi Arabian General Investment Authority (SAGIA), Japanese Ambassador Nobuyasu Abe, ALJ Group President Mohammed Jameel, Denso Corporation President Hiromu Okabe, and Akira Okabe, member of the board and director of Toyota Motor Corporation.
Al-Sharif described the plant as an important addition to overseas investments in the Kingdom. “It will be a forerunner to our efforts in acquiring advanced manufacturing technology and know-how and train Saudis for jobs in the prevailing investor-friendly climate.”
The ambassador said: “This project is significant not only because it is yet another joint venture between the two countries but also that its success will encourage further investments from Japan. After all, Japan is the second largest investor in the Kingdom.”
Mohammed Jameel described the project as another milestone in the 50-year long cooperation of the ALJ Group with Japan. “The idea of transferring technology, especially vehicle-related production, to the Kingdom has been in study for many years, but it always faced many hurdles and an uncertain feasibility. Today, thanks to the very positive and attractive changes in the Kingdom’s foreign investment regulations, producing automobile air conditioners here is not only a viable and feasible endeavor but also a reality. This also gives an added opportunity to us to contribute to the Kingdom’s industrial base and create additional local employment opportunities.” The project was implemented in a record two years, he added.
Hiromu Okabe, who heads Denso that has 88 companies in 29 countries, said manufacture of air conditioners here was a challenging task in view of the tough desert condition and high temperatures in the region.
Yoichi Miyamoto, managing director of Denso Abdul Latif Jameel Co. Ltd., said the factory’s production range would include cooling units, and hoses and tubes. “The factory has already achieved 35 percent Saudization. Saudis manage key positions involving production, and quality assurance and production control. Our plans include raising Saudization to 50 percent and expanding our manufacturing base in areas like car accessories and spareparts. We’ll also target pickups other than Toyota Hilux for the plant’s air conditioners.”
