JEDDAH, 31 August 2007 — Saudi Arabia has been witnessing sustained positive growth amid continued high oil prices, coupled with liberalized economic policies and strategic reforms adopted by the government. Against this backdrop, the Kingdom’s non-oil manufacturing sector as well achieved substantial growth, approximately 10.1 percent in real terms in 2006, the Saudi Industrial Development Fund (SIDF) said in its report published recently.
The industrial sector’s contribution to the country’s GDP had increased to 13 percent by the end of last year, the report said, demonstrating the impressive growth within the sector.
The sector has also contributed extensively to the growth of Saudi exports to international markets.
The oil-based manufacturing sector, i.e., the petrochemicals and fertilizers industries, has also achieved remarkable success in international markets.
Based on the recent available data, the report said that the chemical products sector ranked first (47 percent), followed by the consumer products sector (16 percent), then by the engineering products and the building materials sectors at 13.4 percent and 9.4 percent, respectively. The Saudi labor ratio to total industry labor is a factor that is currently gaining increasing importance at national level, it added.
Saudi employment to total employment for the major industrial sectors showed that the chemical products sector led the other sectors at 36.5 percent. The engineering products sector came next, (24 percent) followed by the building materials sector (22.6 percent) and the consumer products sector (19.3 percent). The Saudization trend points to the private sector’s efforts and continued cooperation with the government in achieving the objective of increasing Saudi industrial employment levels.
Under the year under review, loan commitments approved by SIDF totaled SR6,288 million, a 63 percent increase over the previous year’s commitments, which previously represented the highest value approved in one year.
During the period since inception up to the end of last year, SIDF has extended a total of 2,817 loans, amounting to SR58,262 million. These loans have assisted in the establishment of 1,999 industrial projects throughout the Kingdom.
Loan disbursements from such commitments totaled SR38,157 million, while repayments have reached SR27,019 million, reflecting the prosperity of industrial development in the Kingdom.
The report further said that SIDF approved 86 loans, committed to support 57 new industrial projects and 29 expansions of existing industrial plants.
Yousif Bin Ibrahim Al-Bassam, chairman of the board of directors, said the Fund has continued to achieve record figures in its lending activity, saying that the loans extended over the year “represents an increase of 6.2 percent” over the number of approved loans in 2005.
Loans disbursed to investors over the fiscal year covered by the report totaled SR2,952 million i.e., 37 percent higher than the previous year’s disbursements, the SIDF said.
In the year reviewed, the report said the Fund launched the Small and Medium Enterprises Loan Guarantee Program by approving 51guarantees, totaling to SR22 million, as guarantor for loans totaling SR49 million provided by local commercial banks to small-and medium-enterprises.
Saudi Industrial Development Fund is the recipient of the Gulf Economic Award for 2006, awarded by the Middle East Development Award Institute, Dubai.