Chinese steelmaker to invest $4bn in Ras Al-Khair economic zone
Saudi Arabia’s manufacturing capacity is expected to get a boost with China’s Baoshan Iron and Steel Co. announcing its plans to invest SR15 billion ($4 billion) on a project in Ras Al-Khair’s economic zone.
The Shanghai-based company, one of the world’s largest steelmakers, will manufacture metal plates in the zone, it announced at an event in Riyadh on Monday. The investment is part of the Kingdom’s industrial outreach initiative to incentivize businesses to operate in its special economic zones.
By providing preferential corporate tax rates, exempting businesses from many customs duties and allowing for full foreign ownership of enterprises, Saudi Arabia hopes to transform the regions into investment gateways. Saudi Arabia’s SEZs have also been in the spotlight as they attracted SR47.2 billion ($12.6 billion) worth of investments to date, affirming its emergence as a global trade hub.
Apart from the existing investments made by companies like Lucid Motors and Seera, the Saudi Special Economic Zones Investment Forum in Riyadh on Monday also saw new investment pledges for projects in zones established in Ras Al-Khair, King Abdullah Economic City, Riyadh and Jazan. Oil and energy firm McDermott Arabia Co. is also planning to invest SR375 million in Ras Al-Khair to develop fully integrated engineering construction solutions for the energy industry. Furthermore, Danish equipment company Makeen Energy made a foray into the SEZ with an investment of SR2.14 billion.
“Saudi Arabia will offer foreign investors operating in the Kingdom’s special economic zones extra incentives to hire local workforce,” said Minister of Human Resources and Social
Development Ahmed Al-Rajhi, speaking at a forum in Riyadh on Monday.
The minister noted that the SEZs would be exempt from Saudization requirements, and the Human Resources Development Fund would provide extra benefits should companies hire locals.
“The incentives were decided after carefully studying regional and global benchmarks. And one of these incentives, which is very important probably to investors, is the exemption from Saudization requirements. Yet, they will receive the requirements from HRDF if they choose to hire Saudis,” said Al-Rajhi.