Market Trends of Saudi Arabia Facility Management Industry
Manufacturing And Industrial to Witness Major Growth
- Saudi Arabia's manufacturing industry is rapidly expanding, thanks to government anchor projects, favorable low taxes, and regulations that promote automation. As part of its strategy to diversify from an oil-dependent economy, Saudi Arabia is collaborating with Jordan and Egypt to establish a USD 500 billion industrial zone, NEOM, which will be powered by renewable energy. NEOM will emphasize sectors like energy, biotechnology, food, and advanced manufacturing, thereby boosting the demand for facility management services in the nation.
- Numerous projects are now emphasizing advanced control systems and automation in infrastructure. The push towards Industry 4.0 in manufacturing underscores the nation's commitment to adopting cutting-edge technologies, enhancing production quality and output, and further fueling the growth of the facility management market. A case in point: In November 2023, Vedanta Group, via its subsidiary Malco Energy Limited, inaugurated a copper unit in Saudi Arabia, investing SAR 1 million (USD 0.27 million). The new entity, named Vedanta Copper International (VCI) Business Limited, was announced in an exchange filing.
- Saudi Arabia's manufacturing and industrial facility management landscape is marked by resilience, innovation, and adaptability. As the nation forges ahead with its industrial ambitions, the pivotal role of facility management services in ensuring operational efficiency, safety, and sustainability will become increasingly pronounced.
- With the surge in construction activities by oil and gas firms, facility management players see a golden opportunity to expand their services and capture a larger market share. For example, in May 2024, AlSuwaiket Oil & Gas Services Company, a subsidiary of Mubarak A. AlSuwaiket and Sons, is unveiling a state-of-the-art industrial facility at King Salman Energy Park (Spark). Spanning 41,081 square meters, the facility is set to begin operations in Q2 2025, offering services from advanced drilling techniques and eco-friendly waste management to anti-corrosion material production. The facility will also emphasize onshore and offshore pipeline maintenance, incorporate AI solutions, and utilize cutting-edge security technologies.
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Makkah to Witness Major Growth
- The Makkah Region stands as the kingdom's primary global gateway. Home to Islam's holiest city, Makkah boasts a robust infrastructure and connectivity, allowing it to host millions of pilgrims each year. With substantial backing from key initiatives, Makkah's pivotal sectors are witnessing notable growth. The region's transport and logistics, tourism, mining, manufacturing, and automotive sectors not only attract global attention but also exhibit immense potential.
- Data from the Ministry of Tourism (MoT) in Saudi Arabia reveals that Makkah welcomed 15.4 million international visitors, cementing its status as the premier destination for tourists in Saudi Arabia.
- Moreover, the ongoing infrastructure projects in Makkah underscore the government's commitment to enhancing transportation networks, especially for pilgrims heading to the sacred cities of Makkah and Madinah. With these infrastructure projects gaining traction, there's an escalating demand for management and maintenance services, including cleaning, fire safety systems, and security.
- As the region's tourism thrives, there's a surge in the construction of commercial and hospitality sectors, amplifying the need for facility management services. For example, in July 2024, Alandalus Property Co. unveiled plans for a Makkah project valued at SAR 831 million (USD 222 million) aimed at bolstering the city's commercial infrastructure. Spanning over 50,650 sq. m. in the Makkah Al-Mukarramah region, the new commercial center will boast 350 rental units, including showrooms, retail spaces, hypermarkets, entertainment zones, and dining establishments.
- Additionally, in January 2024, Saudi Arabia's hospitality sector is on the brink of a significant overhaul. Local developers, through a pact between Umm Al-Qura for Development and Construction Co. (the Masar destination owner) and the Kingdom's General Authority of Awqaf, committed SAR 2.5 billion (USD 666.6 million) to Makkah. This collaboration aims to launch a distinctive hospitality project, anticipated to add over 1,000 hotel rooms and suites to the province's accommodation offerings. Such undertakings are projected to spur a substantial demand for facility management services in the foreseeable future.
