Saudi Arabia is pushing towards activating local content in the national industry, specifically in promising sectors.
The Minister of Industry and Mineral Resources, Bandar Ibrahim AlKhorayef, met Tuesday with 20 prominent local and international companies to discuss promising local content opportunities and cooperation between the firms and Government Procurement Authority.
The meeting also addressed the role of the private sector in directing its spending toward local content and the companies' efforts in developing content in several key industries.
Procurement Tools
AlKhorayef stressed that local content has several tools in government procurement that push demand toward local manufacturers and suppliers and help the private sector seize promising investment opportunities.
He noted that industry localization and knowledge transfer pave the way for investors to localize new products.
The Kingdom has promising opportunities to maximize interest by taking advantage of the purchasing power of state-owned companies, especially after the Cabinet decided to compel these companies to prioritize local content.
Content Preference
During the meeting, Khorayef called on the private sector to be equally responsible by prioritizing local content and products in its purchases and projects, identifying localization opportunities in its supply chains, and presenting them to small and medium enterprises (SMEs).
Promising sectors
In a panel entitled "Promising Sectors and Opportunities," the Local Content Forum discussed the role of entrepreneurs in developing local content, products, and services and the importance of research and innovation in enabling local content opportunities.
The executive vice president of operations at the Local Content and Government Procurement Authority Mohammad al-Qahtani and Executive Vice President for Studies at the Industrial Development Fund Ahmed al-Baqawi attended the session.
The session also included Deputy Governor for Entrepreneurship at the General Authority for Small and Medium Enterprises (Monshaat) Saud al-Sabhan and Supervisor of the Localization, Local Content, Risk Management Department at the Ministry of Energy Fouad Moussa.
The participants emphasized that local content highlights the promising sectors and opportunities for entrepreneurs in developing and providing investment opportunities.
Qahtani explained that the Authority is working on several strategic and vital sectors full of promising opportunities to develop local content.
Purchasing power
Qahtani indicated that the Authority targets opportunities to develop local content in several sectors and directs the government's purchasing power toward local content.
The Authority developed many mechanisms and legislation to seize opportunities, including one for government procurement, which compels contractors to deal with government agencies to provide national products from local factories.
He stated that since the activation of the mechanism, the Authority has launched several lists of over eight different sectors and more than 400 other products from national factories. The list continues to be developed and updated.
Small and medium enterprises
Meanwhile, Sabhan explained that SMEs constitute 99.3 percent of the manufacturing activity that contributes to localization.
He noted that local content in the government competition and procurement system directly supports and empowers SMEs, recalling that government purchases in Saudi Arabia increased 26.6 percent until the end of the third quarter of 2021, compared to 24.9 percent in 2019.
He explained that Monshaat launched a service to transform over 3,000 small and medium enterprises and had a role in increasing the local content.
Monshaat seeks to enhance the contribution of SMEs in local content by increasing the opportunities for their participation in the commercial franchise to expand their activities.
Entrepreneurs
Executive Vice President for Studies at the Industrial Development Fund Ahmed al-Baqawi stated that the Fund supports the client and the private sector to advance the Kingdom under Vision 2030.
Baqawi explained that young men and women at the Fund provide appropriate advice to the investor, pointing out that the Fund is a forum for all entrepreneurs in various fields.
Risk management
Meanwhile, Ministry of Energy official Fouad Moussa explained that the energy sector has a significant impact on the economy in the Kingdom.
Energy represents 45 percent of capital and operational spending and provides excellent opportunities for the products used in the energy, petroleum, gas, petrochemical, and electricity production sectors.
Moussa indicated that Saudi Arabia is heading to become the largest producer of hydrogen, which will become the future fuel.
He indicated that the Ministry had set new targets to localize the main products used directly in capital and operational spending and seeks to use available resources to serve the energy sector, ensuring it becomes parallel to other industries.
