Saudi LCGPA Launches Additional Price Preference for Local Products

The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products. (SPA)
The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products. (SPA)
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Saudi LCGPA Launches Additional Price Preference for Local Products

The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products. (SPA)
The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products. (SPA)

The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products in the medicine, pharmaceuticals and medical supplies sectors, as well as other industrial sectors.

The initiative was launched in cooperation with the Ministry of Industry and Mineral Resources and the Spending Efficiency Center.

The initiative aims to increase the price preference percentage granted to these products when compared to foreign counterparts during the bidding process in government competitions, the authority said.

The percentage, which was earlier determined by the local content preference regulations at 10%, was raised to 30% maximum, based on each sector’s standards. The move aims to mitigate the financial and economic impact on those sectors amid the COVID-19 pandemic.

The authority said the products were determined based on criteria differing from sector-to-sector according to its nature.

The new mechanism is based on providing a price preference of up to 20% for the products covered by the initiative; 10% under the initiative and 10% as per the price preference regulations. Every 10% preference will be based on the specific criteria of each sector targeted under the initiative.

Products identified in the Medicine and Pharma Sector are granted an additional preference of up to 10%, being included in the list, plus the other 10% if the product contains domestic Active Pharmaceutical Ingredient (API).

The initiative is based on Article 10 of the regulations granting preference to local content, Saudi SMEs and publicly listed companies. It also aims to help the sectors achieve self-sufficiency and strengthen supply chain for the target products.

LCGPA expects that the estimated spending on national factories during the initiative period, which ends on Dec. 31, 2021, will range between SAR 2 billion and SAR 3 billion.

The authority said the products were identified after a detailed study by the work team in the initiative. The study included 10,000 products, excluding those in the mandatory list.

A list of the target national products and the additional preference rates for each product will be issued in detail, and each product will be distributed according to the category within the additional price preference initiative, the authority said.



Saudi Arabia’s Non-Oil Industrial Sector Grows 5.3% in 2024

Saudi flags along a street in the capital, Riyadh (Reuters) 
Saudi flags along a street in the capital, Riyadh (Reuters) 
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Saudi Arabia’s Non-Oil Industrial Sector Grows 5.3% in 2024

Saudi flags along a street in the capital, Riyadh (Reuters) 
Saudi flags along a street in the capital, Riyadh (Reuters) 

Saudi Arabia’s non-oil industrial sector recorded a strong 5.3% growth in 2024, underlining the Kingdom’s ongoing progress in diversifying its economy in line with the Vision 2030 agenda. The latest figures from the General Authority for Statistics (GASTAT) reveal that this growth was largely driven by manufacturing, utilities, and infrastructure development.

Despite the robust performance of the non-oil sector, overall industrial production declined by 2.3% compared to 2023. This contraction was mainly due to a 5.2% drop in oil-related activities, following the Kingdom’s adherence to OPEC+ oil production cuts. As a result, mining and quarrying shrunk by 6.8%.

Manufacturing expanded by 4.7% year-on-year, with food production up 6.2% and chemical manufacturing, including refined petroleum products, rising by 2.8%. These gains reflect increasing industrial capacity and rising demand in both domestic and export markets.

Other areas of growth included utilities and public services. Electricity, gas, steam, and air conditioning activities grew by 3.5%, while water supply, sewage, and waste management services posted a 1.6% increase.

Minister of Economy and Planning Faisal Alibrahim recently stated that non-oil activities now account for 53% of the Kingdom’s real GDP, compared to significantly lower levels before the launch of Vision 2030. He also noted a 70% increase in private investment in non-oil sectors over the same period.

The Kingdom’s non-oil exports reached SAR 515 billion (approximately $137 billion) in 2024, marking a 13% rise over 2023 and a 113% increase since 2016. Export growth spanned petrochemical and non-petrochemical products, with merchandise exports alone totaling SAR 217 billion.

According to a recent World Bank report, Saudi Arabia’s economy grew by 1.8% in 2024, up from 0.3% in 2023. While oil-sector output fell 3%, the non-oil economy expanded by 3.7%, cushioning the broader economy from energy market volatility. The World Bank forecasts continued growth, projecting a 2.8% increase in 2025 and an average of 4.6% annually through 2026 and 2027.