Building the Saudi Automotive Cluster
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Transcript of Building the Saudi Automotive Cluster
3 www.ic.gov.sa
Industrial Clusters Program assigned by the Council of
Ministers to attract automotive industry investments
Objectives include:
1. Building a sustainable & globally competitive Cluster
2. Developing anchor OEM & key supplier projects
3. Facilitating start up of OEM, supplier & service businesses
4. Enabling environment for the Cluster to compete globally
A focal agency for automotive companies
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50,000 vehicles Phase I
Phase II
Phase III
Phase IV
150,000 vehicles
300,000 vehicles
400,000 vehicles
A sustainable automotive cluster competitively serving the needs of fast growing regions
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The Saudi Cluster has a unique value proposition
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market
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Vehicle
Manufacturing,
Development
&
Engineering
Manufacture
Components &
parts
OEMs Suppliers
Industrial Clusters Program
Universities, training, services, utilities, logistics…
Forging “Development Partnerships” with companies
Basic
Materials
Metals &
Plastics MARKETS
IMPORTS
AutoZone Authority
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market
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Projects benefit from attractive incentives
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market
1. AutoZone with phase 1 infrastructure investments ~ $400 million
i. Industrial land & factory building lease at highly competitive terms
ii. Utilities at competitive terms
2. Public Private investment company “AutoCo” ~ $300 million capital
i. Invest in anchor projects in partnership with OEMs & qualified suppliers
3. Human Capital development incentives
i. Auto Academy investment ~ $70 million
ii. Wage & training financial incentives for Saudi employees
4. Financial & Fiscal incentives
i. Industrial loans at highly competitive terms
ii.Export finance & insurance at competitive terms
iii. Import duty exemption for machinery, material & components
iv. Flat corporate tax @ 20% with losses carry forward
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New Vehicle & Truck projects
• Isuzu 25,000 annually commercial vehicles - started 2012
• Jaguar Land Rover – LOI signed 2012
Auto Cluster is making steady progress
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market
New Parts & Components projects
• PCC Small plastic parts - start operations 2013
• PCC Under the hood Nylon parts - start operations 2013
• Aluminum & steel stamping - LOI signed 2013
• Large Plastic parts - LOI signed 2013
• Aluminum casting - LOI signed 2013
• Seat and harness - LOI signed 2013
LOI – Letter of intent
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The AutoZone conceived with OEM input
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market
AutoZone concept developed with Oliver Wyman consulting firm
Targets are significant reduction in investment & unit cost for companies
Concept was tested with 4 global OEMs in 2012
OEM feedback was incorporated in the latest AutoZone concept
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Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market
OEMs
Zone Infrastructure Shared Facilities & Services
Suppliers & Services
• Developed plots
• Utilities hook up at the plot
• Roads and highway network
• Connectivity to ports & airport
• Auto Academy
• University
• Vocational training
• Bonded Zone
• Business park
• Civic & security services
• People & products transportation
• Housing & Recreation
• International & Saudi Schools
• Hospital and clinics
• Retail centers
• Hotels
• Alum & Steel Stamping
• Large Plastic parts
• Supplier “condo”
• Lease factory buildings
• Central Logistics
• Shared technical services
• Testing and test track
Community Living
• Body
• Painting
• General Assembly
• Quality
The AutoZone ~ 10 million square meters
Innovative AutoZone maximizing shared processes, facilities and services
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Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market Local key basic materials are a competitive advantage for the Cluster
Petrochemicals & Plastics Clusters
Jeddah
Riyadh
Arar
Tabuk
Sakakah
Hail
Buraydah
Madinah
Abha
Makkah
Najran
Ras al Khair Az Zabirah
Baha
Al Amar
Damman
Jubail
Rabigh
Jazan
Yanbu
Metals Clusters
Maaden Alcoa Aluminum Complex
• Mine to Auto sheet
• Aluminum sheet series 5 & 6
• Liquid Aluminum for Auto cast products
Sabic Hadeed Steel Complex
• Cold Sheet for automotive
Plastics & Chemicals (selected few)
• Polypropylene
• Elastomers
• ABS
• Polycarbonate
• Nylon 66
• Polyurethane
• Carbon Fiber
• Carbon black
• Adhesives
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The Land bridge Railway 2020
• passengers and cargo
GCC railway 2017
• passengers and cargo
North-South railway 2014
• passengers and cargo
Haramain high-speed rail 2014
• passengers
Haramain high speed rail
Land bridge railway Existing network
Dammam
Madinah Riyadh
Jazan
Hail
Jeddah
Yanbu
Rabigh
Korayat
Haditah Hazam Al-Jalamid
Raz Al Khair
Jubail
Makkah
Abu Dhabi
Dubai Fujairah
Sohar
Muscat
Duqm
OMAN
UAE
KUWAIT
North-south railway
GCC Railway
Yemen
Salalha
Abu Hadriyah
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market Major rail projects significantly improve logistics
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Jeddah
Yanbu
KAEC
King Fahed Industrial
Port, Yanbu
Jeddah Islamic Port
King Abdullah Economic City Port
Number of Berth by Type 7 including 2 container & 1 Ro-Ro
62 including 11 container &10 Ro-Ro
2 including Ro-Ro
Throughput, 2011 (tons m) 33.7 52.0 4.5 (20 target)
Containers 2011 (tons m) 0.4 41.2 0.0
Ro-Ro, 2011 (tons m) 0.0 1.3 0.0
West coast
SOP 2013
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market Sea Ports provide efficient & cost effective import export operations
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7.90
Saudi Labor
Force
4.70
Saudi Labor
Population
(age 15 and
over)
12.55
Saudi
Population
19.40
Saudi Labor
Force 2024
33%
7%
9%
52%
SAUDI POPULATION & NATIONAL LABOR FORCE, 2011, [million]
SAUDI LABOR FORCE FORECAST BY LEVEL OF EDUCATION, 2024, [%]
High-school Graduates
Diploma Graduates
University Graduates
Below High-school
2011 2024
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market A Well educated Labor Force is the source for the Cluster long term competitiveness
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• High Institute of Plastic Fabrication
• High Institute for Elastomer Industries
• High Institute for Metals Technology
• Auto Academy
Specialized training institutes preparing Saudi talent to work in Auto Cluster
• SABIC & SPDC of Japan
• Akron university
• Under development
• Under development
Operator
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market
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714 880 1005
1,543
1,962
2,292
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2012 2016 2021
652 771 844
1,407
1,718 1,923
2,059
2,490
2,767
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2012 2016 2021
Saudi (Minimum) MENA without Saudi (Minimum)
Saudi (Maximum) MENA without Saudi (Maximum)
3,298
2,840
2,257
MENA Market
• 2.8 - 3.3 million vehicles annually
• 67% dominance by Japanese &
Korean imports
• 41% C & D segments
• 20% SUVs
Auto Cluster
AutoZone
Materials
Infra-structure
Human capital
Market Robust growth in MENA region is a significant opportunity for Cluster companies
Thousand units per year
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Moving Forward
• Saudi Auto Cluster is a unique opportunity with a long term horizon
• Collaboration between Government and Companies in building the Cluster
• Companies can benefit from the advantages for early movers
• Industrial Clusters Program devoted to work with you to explore opportunities
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The Kingdom of Saudi Arabia
Your Contact: Abdallah Al-Hazani
Mobile: +966 505284005
Email: [email protected]
Saudi Arabia, land of opportunities