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Saudi Factories Surpass 2023 Targets, Boosting Product Competitiveness

A Saudi factory located in the industrial city of Asir in the southern region of the Kingdom (Asharq Al-Awsat)
A Saudi factory located in the industrial city of Asir in the southern region of the Kingdom (Asharq Al-Awsat)
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Saudi Factories Surpass 2023 Targets, Boosting Product Competitiveness

A Saudi factory located in the industrial city of Asir in the southern region of the Kingdom (Asharq Al-Awsat)
A Saudi factory located in the industrial city of Asir in the southern region of the Kingdom (Asharq Al-Awsat)

Saudi factories are increasingly adopting automation to improve product quality and competitiveness while cutting costs.
A total of 479 factories have completed the Smart Industry Readiness Index “SIRI” assessment, exceeding the Kingdom’s 2023 targets.
The Ministry of Industry and Mineral Resources started evaluating the second group of factories under the Future Factories Program in July 2023. This phase covers 260 factories, each with licensed capital over SAR 200 million ($53.3 million).
According to a recent report reviewed by Asharq Al-Awsat, the Ministry resolved 97 challenges last year and provided consultancy support to 17 factories to protect national industries from unfair competition.
In the 2023 Digital Transformation Measurement Program, the Ministry achieved 87.08% success and connected with over 67 government entities. It also launched several systems and websites to support its strategic goals.
Saudi Arabia’s mining sector achieved a 98% compliance rate in licensing, with 15 new mining sites designated last year.
The government launched a geological mapping project for the Arabian Shield, producing 271 reports and maps, and introduced a service to match petrochemical raw materials with industrial needs.
The Ministry of Industry and Mineral Resources reported a 10% increase in operational factories in 2023, from 10,518 in 2022 to 11,549. New licenses totaled 1,379, attracting over SAR 81 billion ($21.6 billion) in investments. Production began in 1,058 factories, with investments of SAR 45 billion ($12 billion).
By the end of December 2023, the total number of operational factories in Saudi Arabia reached around 11,549, with investments totaling SAR 1.541 trillion ($410.9 billion).
New licenses covered 25 industries, led by food production (244 licenses), non-metallic minerals (176), fabricated metals (165), and rubber and plastics (123).
National companies received the majority of new licenses (1,043), followed by foreign investments (194) and joint ventures (142).
Small enterprises received the most licenses (1,203), followed by medium-sized enterprises (158), micro-enterprises (15), and large enterprises (3).

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Air France-KLM to Take Majority Stake in Scandinavian Airline SAS

(COMBO) This combination of pictures created on July 04, 2025 shows a Scandinavian airline SAS plane flying over Heathrow airport on the outskirts of London on January 15, 2024 (top) and an Air France-KLM plane taking off from Tegel 'Otto Lilienthal' Airport in Berlin on November 8, 2020. (Photo by Adrian DENNIS and Odd ANDERSEN / AFP)
(COMBO) This combination of pictures created on July 04, 2025 shows a Scandinavian airline SAS plane flying over Heathrow airport on the outskirts of London on January 15, 2024 (top) and an Air France-KLM plane taking off from Tegel 'Otto Lilienthal' Airport in Berlin on November 8, 2020. (Photo by Adrian DENNIS and Odd ANDERSEN / AFP)
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Air France-KLM to Take Majority Stake in Scandinavian Airline SAS

(COMBO) This combination of pictures created on July 04, 2025 shows a Scandinavian airline SAS plane flying over Heathrow airport on the outskirts of London on January 15, 2024 (top) and an Air France-KLM plane taking off from Tegel 'Otto Lilienthal' Airport in Berlin on November 8, 2020. (Photo by Adrian DENNIS and Odd ANDERSEN / AFP)
(COMBO) This combination of pictures created on July 04, 2025 shows a Scandinavian airline SAS plane flying over Heathrow airport on the outskirts of London on January 15, 2024 (top) and an Air France-KLM plane taking off from Tegel 'Otto Lilienthal' Airport in Berlin on November 8, 2020. (Photo by Adrian DENNIS and Odd ANDERSEN / AFP)

Air France-KLM plans to increase its stake in Scandinavian airline SAS to 60.5%, the latest step towards consolidating Europe's fragmented airline sector as carriers seek to strengthen their position against rivals.

The Franco-Dutch airline group said on Friday it intended to increase its stake from 19.9% currently by acquiring the stakes held by top shareholders Castlelake and Lind Invest.

The purchase, subject to regulatory clearances, is expected to close in the second half of 2026, Reuters quoted Air France-KLM as saying.

The value of the investment would be determined at closing, based on SAS's latest financial performance, including core earnings (EBITDA) and net debt, the company said. It declined to give details on those metrics.

Air France-KLM expects to generate "three-digit million" euros in synergies from raising its SAS stake, Air France-KLM finance chief Steven Zaat told analysts on a call.

Zaat said the deal would be funded from cash or a "plain vanilla bond" and would not impact the drive to reduce the group's hybrid debt. "We have ample room for it," he said.

Air France-KLM shares were flat in early trading.

JPMorgan analysts said there were reasons to be positive about the deal.

"SAS offers deeper access to a GDP-rich region in Scandinavia, there will now be an opportunity to unlock cost synergies as SAS becomes a subsidiary of the group," they said in a note, adding that "industry consolidation should also be viewed positively for the whole sector, even if not game-changing in terms of size."

INDUSTRY CONSOLIDATION

SAS welcomed Air France-KLM's announcement.

"European consolidation had to happen further, and we're very happy to be part of that," SAS CEO Anko van der Werff told Danish broadcaster TV2.

"In the current setup where Air France-KLM is a 19.9% shareholder, they're still a competitor," he said. "With the new stake, going above 50%, we can really tap into all of those synergies and offer those benefits to customers."

SAS said it would continue to invest in its fleet and network.

In 2023, Air France-KLM said it would invest about $144.5 million for its initial SAS stake, boosting its presence in Sweden, Denmark and Norway with the option to become a controlling shareholder after a minimum of two years, subject to conditions.

SAS exited from Chapter 11 bankruptcy protection in August last year.

The two carriers have already had a commercial cooperation since summer 2024. Control of SAS would allow Air France-KLM to expand in the Scandinavian market and create additional value for shareholders, Air France-KLM said in a statement.

"Following their successful restructuring, SAS has delivered impressive performance, and we are confident that the airline's potential will continue to grow through deeper integration within the Air France-KLM Group," said Air France-KLM CEO Ben Smith.

The deal comes as executives seek more consolidation in Europe's fragmented airline industry, which they say is needed to compete with US and Middle Eastern rivals.

Earlier this year, Germany's Lufthansa bought a 41% stake in Italy's ITA Airways and a stake in Air Baltic. The Portuguese government is looking to privatize its national carrier TAP.

Lufthansa and Air France are also in talks about buying a stake in Spain's Air Europa.
SAS has 138 aircraft in service and carried more than 25 million passengers last year, generating revenues of 4.1 billion euros ($4.8 billion).

Air France-KLM group would have a majority of seats on the board of directors, while the Danish state will keep its 26.4% stake in SAS and its seats on the board.