Saudi Arabia’s supply chain growth benefits foreign investors and businesses by creating a more stable and attractive global trade and investment environment, particularly with the Saudi Vision 2030 goals of becoming a logistics hub and fostering strategic industries.
The Saudi Arabian supply chain market is projected to grow significantly, reaching US $970 million by 2033 from US$560 million in 2024. Strategic initiatives, technological advancements, and infrastructural developments drive the growth.
Supply chain benefits for foreign investors primarily arise from increased market access, opportunities in diverse sectors, and a strategic location for global trade. The government’s efforts at diversifying the country’s economy will create new opportunities for foreign investors in various sectors like real estate, technology, and tourism.
The Factors Contributing to Saudi Supply Chain Growth
Strategic Location and Infrastructure:
- Logistics Hub:
Saudi Arabia’s geographic location at the crossroads of Europe, Asia, and Africa makes it ideal for a global logistics hub.
- Vision 2030:
The Vision 2030 plan is a significant catalyst for supply chain development, aiming to transform Saudi Arabia into a global logistics hub.
- Improved Infrastructure:
Investments in infrastructure, including ports, roads, and railways, are enhancing the efficiency and capacity of supply chains. Mega projects like NEOM, Red Sea Global, and Riyadh Metro are creating opportunities for supply chain networks.
- Access to Major Shipping Routes:
Access to major shipping routes through the Red Sea and Arabian Gulf facilitates efficient transport of goods across continents.
Favourable Business Environment and Incentives:
- Simplified Regulations:
Saudi Arabia has implemented significant reforms to make it easier for foreigners to start and operate businesses, including 100% foreign ownership.
- Supportive Environment:
With improved business regulations, tax breaks, incentives, and simplified processes, Saudi Arabia offers a supportive environment for businesses, making market entry more straightforward and cost-effective.
The Saudi government is actively promoting foreign investments through initiatives like the Global Supply Chain Resilience Initiative (GSCRI) and the National Investment Strategy, which aims to improve the country’s global supply chain resilience and attract FDI.
Economic Stability and Growth:
- Economic Stability:
Saudi Arabia’s economic stability and growth prospects are attractive to foreign investors.
- Growing Demand:
The growing demand for goods and services in Saudi Arabia presents significant business opportunities. The focus is boosting value-added industries within Saudi Arabia, creating jobs for the country’s young population.
- Tourism Boost:
Religious and cultural tourism also boosts the real estate sector, creating further opportunities.
Supply chain benefits for foreign investors
For foreign businesses, Saudi Arabia’s supply chain sector offers benefits like improved infrastructure, global recognition, and the opportunity to integrate into a growing market.
How Logistics Infrastructure Powers Supply Chain Growth in Saudi
Saudi Arabia is investing heavily in its logistics infrastructure to become a global hub. With plans to expand logistics zones, improve road and rail networks, and modernize ports and airports, Saudi Arabia is creating new logistics business opportunities.
Here’s a more detailed look at the logistics infrastructure which is boosting supply chain growth in Saudi Arabia:
- Logistics Zones:
Saudi Arabia aims to increase the number of logistics zones from 22 to 59 by 2030, focusing on developing 18 zones near ports, representing an investment of over $2.66 billion.
- Road Network:
The kingdom has a vast road network, including 73,000 km of national roads, with plans to further enhance it to improve connectivity and efficiency.
- Railway Network:
Saudi Arabia is expanding its railway network, aiming to increase the track length from 4,500 km to 8,000 km, connecting industrial and port areas.
- Airports:
The kingdom has 29 airports, including 10 international, three regional, and 16 domestic, with plans to increase air cargo capacity to over 4.5 million tons annually by 2030.
- Marine Ports:
Saudi Arabia operates 10 ports for non-oil trade, handling 280 million tons of cargo annually, with plans to further improve port efficiency and capacity.
- Digital Transformation:
Saudi Arabia is embracing digital technologies like AI, IoT, and blockchain to optimize supply chains, improve efficiency, and enhance transparency.
National Transport and Logistics Strategy:
The National Transport and Logistics Strategy aims to increase the transport and logistics contribution to the GDP to 10% by 2030, from approximately 6% in 2021.
- Focus on Sustainability:
Global emphasis on sustainability influences Saudi Arabia’s supply chain strategies, with companies adopting green logistics practices. The country is also focusing on sustainable solutions for the transportation sector, including adopting Sustainable Aviation Fuel and initiatives to improve fleet productivity and optimize delivery routes.
How can the Helpline Group in Saudi Arabia be of assistance?
Helpline Group, backed by a strong and experienced team, brings over 25 years of expertise in company formation, including setting up a supply chain business in Saudi Arabia, offering a seamless, hassle-free experience for clients, including foreigners.
Our skilled professionals help foreign investors establish businesses by leveraging the supply chain growth in Saudi Arabia, thus enabling the emergence of Saudi Arabia as a trade hub in the Middle East.
With a global presence and a tailored approach, we ensure that your business setup is handled with precision and professionalism, making us your reliable ally in achieving success.
