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Saudi MODON Attracts Investments Worth $34.6 Mn to Localize Aircraft Industries

A view of an exhibit at the World Defense Show 2024 in Riyadh. (Asharq Al-Awsat)
A view of an exhibit at the World Defense Show 2024 in Riyadh. (Asharq Al-Awsat)
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Saudi MODON Attracts Investments Worth $34.6 Mn to Localize Aircraft Industries

A view of an exhibit at the World Defense Show 2024 in Riyadh. (Asharq Al-Awsat)
A view of an exhibit at the World Defense Show 2024 in Riyadh. (Asharq Al-Awsat)

The Saudi Authority for Industrial Cities and Technology Zones (MODON) has attracted investments worth $34.6 million to localize military aircraft industries, including drones, and provide repair, maintenance, and overhaul services for ships.

The investment is one of the authority’s objectives to promote investment opportunities in industrial cities among major local and international companies.

MODON signed two contracts to allocate two ready-made factories with an area of 700 square meters and investments of $13.3 million in manufacturing military aircraft, parts and pieces of military and civil aircraft, and drones.

It concluded a contract to allocate a logistics land area of 3,000 square meters and investments of $8 million for ship repair and maintenance.

The contract also stipulates repair, maintenance, and overhaul services for spare parts for military vehicles, aircraft, ships, water filtration devices, ship and train engines, and valves.

MODON participated in a pavilion in the second edition of the World Defense Show 2024, held in Riyadh between February 4 and 8.

The event was held under the patronage of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz, to represent the industrial sector and highlight the qualitative opportunities, capabilities, and incentives to enable military industries to align with the National Industrial Strategy.

According to MODON, the benefits of investing in its 36 industrial cities throughout the Kingdom include the availability of a labor force, advanced infrastructure, and logistical solutions that help achieve a competitive and sustainable industrial economy.

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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)

Saudi Arabia’s non-oil exports soared to a two-year high in May, reaching SAR 28.89 billion (USD 7.70 billion), marking an 8.2% year-on-year increase compared to May 2023.

On a monthly basis, non-oil exports surged by 26.93% from April.

This growth contributed to Saudi Arabia’s trade surplus, which recorded a year-on-year increase of 12.8%, reaching SAR 34.5 billion (USD 9.1 billion) in May, following 18 months of decline.

The enhancement of the non-oil private sector remains a key focus for Saudi Arabia as it continues its efforts to diversify its economy and reduce reliance on oil revenues.

In 2023, non-oil activities in Saudi Arabia contributed 50% to the country’s real GDP, the highest level ever recorded, according to the Ministry of Economy and Planning’s analysis of data from the General Authority for Statistics.

Saudi Finance Minister Mohammed Al-Jadaan emphasized at the “Future Investment Initiative” in October that the Kingdom is now prioritizing the development of the non-oil sector over GDP figures, in line with its Vision 2030 economic diversification plan.

A report by Moody’s highlighted Saudi Arabia’s extensive efforts to transform its economic structure, reduce dependency on oil, and boost non-oil sectors such as industry, tourism, and real estate.

The Saudi General Authority for Statistics’ monthly report on international trade noted a 5.8% growth in merchandise exports in May compared to the same period last year, driven by a 4.9% increase in oil exports, which totaled SAR 75.9 billion in May 2024.

The change reflects movements in global oil prices, while production levels remained steady at under 9 million barrels per day since the OPEC+ alliance began a voluntary reduction in crude supply to maintain prices. Production is set to gradually increase starting in early October.

On a monthly basis, merchandise exports rose by 3.3% from April to May, supported by a 26.9% increase in non-oil exports. This rise was bolstered by a surge in re-exports, which reached SAR 10.2 billion, the highest level for this category since 2017.

The share of oil exports in total exports declined to 72.4% in May from 73% in the same month last year.

Moreover, the value of re-exported goods increased by 33.9% during the same period.