Saudi Arabia licensed 903 new factories worth $6.27bn in 2020

Saudi Arabia licensed 903 new factories worth $6.27bn in 2020
The total number of work force in the industrial sector increased by 17,807. (Shutterstock)
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Updated 11 January 2021

Saudi Arabia licensed 903 new factories worth $6.27bn in 2020

Saudi Arabia licensed 903 new factories worth $6.27bn in 2020
  • Existing and under-construction factories totaled 9,681 across the Kingdom in 2020

Saudi Arabia licensed 903 new factories worth SR23.5 billion ($6.27 billion) in 2020, recent data issued by Ministry of Industry and Mineral Resources showed.

The total number of factories that began actual production reached 515 last year.

The total number of Saudi workers in the new facilities stood at 39,404. The total number of work force in the industrial sector increased by 17,807, of which nationals and expats rose by 9,495 and 8,312, respectively.

The ministry will continue to develop the sector, Bandar Alkhorayef, Minister of Industry and Mineral Resources, said, affirming that it has a more bullish outlook for better opportunities this year.

Existing and under-construction factories totaled 9,681 across the Kingdom in 2020, of which non-metallic minerals plants accounted for 20 percent, or 1,935. Rubber products plants came second with 1,268, followed by plants of unclassified machinery and equipment with 1,162.

Meanwhile, a total of 73 new plants were licensed in December 2020, with 30 facilities commencing production.

The total investment cost of these plants stood at SR2.15 billion ($570 million).


WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range
Updated 25 min 10 sec ago

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

Oil prices have been stable since early January, with Brent crude price hovering around $55. Brent crude closed the week slightly higher at $55.41 per barrel,
while West Texas Intermediate (WTI) closed slightly lower at $52.27 per barrel.

Oil price movement since early January in a narrow range above $50 is healthy, despite pessimism over an increase in oil demand, while expectations of US President Joe Biden taking steps to revive energy demand growth are
still doubtful. The US Energy Information Administration (EIA) reported a hike in US refining utilization to its highest since March 2020, at 82.5 percent. The EIA reported a surprise weekly surge in US commercial crude stocks by 4.4
million barrels. Oil prices remained steady despite the bearish messages sent from the International Energy Agency (IEA), which believes it will take more time for oil demand to recover fully as renewed lockdowns in several countries weighed on oil demand recovery.

The IEA’s January Oil Market Report came as the most pessimistic monthly report among other market bulletins from the Organization of the Petroleum Exporting Countries (OPEC) and EIA. It forecast oil demand will bounce back to 96.6 million bpd this year, an increase of 5.5 million bpd over 2020 levels.

Though the IEA has lowered its forecast for global oil demand in 2021 due to lockdowns and vaccination challenges, it still expects a sharp rebound in oil consumption in the second half of 2021,
and the continuation of global inventory depletion.

The IEA reported global oil stocks fell by 2.58 million bpd in the fourth quarter of 2020 after preliminary data showed hefty drawdowns toward the end of the year. The IEA reported OECD industry stocks fell for a fourth consecutive month at 166.7
million barrels above the last five-year average. It forecast that global refinery throughput is expected to rebound by 4.5 million bpd in 2021, after a 7.3 million bpd drop in 2020.

The IEA monthly report has led to some short term concern about weakness in the physical crude spot market, and the IEA has acknowledged OPEC’s firm role in stabilizing the market.

Controversially, the IEA believes that a big chunk of shale oil production is profitable at current prices, and hence insinuated that shale oil might threaten OPEC market share.

It also believes that US shale oil producers have quickly responded to oil price gains, winning market share over OPEC producers. However, even if US shale oil drillers added more oil rigs for almost three months in a row, the number of operating rigs is still less than half that of a year ago, at 289 rigs.

The latest figures from the Commodity Futures Trading Commission show that crude futures “long positions” on the New York Mercantile Exchange are at 668,078 contracts, down by 18,414 contracts from the previous week (at 1,000 barrels for each contract).