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Saudi MODON Signs Contract for First Food Factory in Jeddah

Saudi MODON Signs Contract for First Food Factory in Jeddah
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Saudi MODON Signs Contract for First Food Factory in Jeddah

Saudi MODON Signs Contract for First Food Factory in Jeddah

The Saudi Authority for Industrial Cities and Technology Zones (MODON) signed a contract with Nestlé to allocate a 117,000-square-meter industrial plot in the Jeddah Third Industrial City.

The contract aims to establish the first food factory in the Kingdom, scheduled to open in 2025, with an initial investment of SAR270 million to boost local production, reported the Saudi Press Agency on Sunday.

The signing ceremony was held under the patronage and in the presence of Minister of Industry and Mineral Resources Chairman of MODON Bandar bin Ibrahim Al-Khorayef, MODON CEO Eng. Majed Al-Argoubi and Nestlé Saudi Arabia CEO Robert Helou.

In its initial phase, the project will focus on producing baby food and launching an automated production line equipped with the latest packaging technologies operated by qualified national food industry personnel.

The project is expected to create hundreds of direct and indirect jobs during its first phase, with an initial annual production capacity of 15,000 tons.

In line with the National Industrial Strategy, MODON seeks to boost the food industries sector through the food cluster initiative in Jeddah's second and third industrial cities. The food cluster aims to enhance supply chains and promote exports by providing an integrated and supportive environment, which positively impacts the growth and development of the food industry sector in the region.

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Investment Incentives Drive Growth in Saudi Restaurants and Cafés Sector

The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030. (Asharq Al-Awsat)
The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030. (Asharq Al-Awsat)
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Investment Incentives Drive Growth in Saudi Restaurants and Cafés Sector

The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030. (Asharq Al-Awsat)
The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030. (Asharq Al-Awsat)

Saudi Arabia’s restaurant and café sector is experiencing rapid growth, fueled by a young population and rising disposable incomes, making the country an attractive market for international brands. The sector is expected to expand further, supported by new investment laws and government initiatives.

Saudi Arabia, one of the largest markets in the region, is witnessing a boom in its restaurant and café industry, with both local and international brands competing for market share. The sector is expected to grow even more with the introduction of the new investment law, designed to attract investors by simplifying investment procedures.

The Saudi government recently approved a new investment system, which is seen as a significant move to stimulate foreign investment and support local businesses.

According to Saudi Minister of Investment Khalid Al-Falih the law builds on previous reforms, ensuring a supportive and secure environment for both domestic and international investors.

Sales in Saudi restaurants and cafés reached SAR 23.96 billion ($6.38 billion) in the second half of 2024, a 30.6% increase compared to the same period in 2022.

The sector saw continued growth, with restaurant sales rising by 13.66% to SAR 89.3 billion ($23.8 billion) in 2023, up from SAR 78.6 billion the previous year.

Spending in cafés and restaurants accounted for 14.76% of total sales transactions across all sectors during this period.

The restaurant and café sector plays a crucial role in Saudi Arabia’s Quality of Life program and Vision 2030, as it boosts the Kingdom’s lifestyle and aims to reach 3,000 restaurants and over 1,000 cafés per million residents by 2030.

Research firm Mordor Intelligence expects the Saudi food service market to grow from $27.18 billion in 2024 to $42.48 billion by 2029, with a compound annual growth rate of 9.34%.

The café sector, in particular, is expected to grow at an annual rate of 11.74%, driven by increasing demand for social and workspaces. Saudi Arabia already hosts over 40% of the Middle East’s 8,800 branded cafés.

In line with this growth, the Lavoya Restaurants Group, which operates fast-food chains across the Gulf, is expanding in Saudi Arabia. Najib Yaacoub, Chief Operations Officer at Lavoya Restaurants Group, said the expansion will create job opportunities and contribute to the national goal of increasing employment in the hospitality sector.