Promising Investment Opportunities Worth 60 Billion Riyals After Covering Iron Sector Deficit in Saudi Arabia

SadaNews - Saudi Arabia has completed the study of optimal options to cover the deficit in the local iron and steel market, which involves manufacturing seven products, allowing for investment opportunities estimated at around 60 billion Riyals, according to Bandar Al-Khorayef, the Saudi Minister of Industry and Mineral Resources.

During his speech at the third Iron and Steel Conference held in Riyadh, he indicated that the sector has faced real challenges in recent years, the most significant being the surplus in rebar production compared to local demand, limited production capacity in high-value products, in addition to competition from imports that reached double the country's capacity for flat iron.

Al-Khorayef noted that the ministry has taken steps to restructure the sector to fill gaps, increase added value, and ensure the sustainability of supply chains.

During a panel discussion that included Egyptian Minister of Transport and Industry Kamel Al-Wazir, Al-Khorayef stated that the restructuring of the sector has contributed to reducing the amount of imported iron from 7 million tons in 2019 to 4 million tons currently, noting that the strategy is to increase production capacity to meet local demand for iron coming from construction projects in the housing sector, in addition to infrastructure projects, transport, ports, and industrial cities. He expected that the country's iron production would reach 25 million tons by 2035.

The Saudi official added that the Kingdom also aims to export iron products as part of achieving the goal that 50% of non-oil GDP is sourced from exports.

Quality Achievements

Al-Khorayef pointed out in his speech that significant achievements have been made in the past period, the most notable of which are; the independence of Hadid Company to become a national entity specialized in iron products with an expansion in high-performance products, establishing Bab Al-Khair Company in partnership with "Baosteel" from China, "Aramco," and the Public Investment Fund to produce heavy iron plates in Ras Al-Khair, in addition to restarting Sadeed Company in Jizan, and merging non-welded pipe companies into a unified entity to enhance production capacity and competitiveness.

Additionally, work has been completed on studying the conditions of small factories relying on induction furnaces for rebar production, aimed at improving their efficiency and sustainability, according to Al-Khorayef. He revealed that the Industrial Center has been tasked with updating the national plan for restructuring the iron sector in line with local and global developments, alongside reviewing related policies and regulations to enhance sustainability and improve the investment environment.

Al-Khorayef identified the attractiveness of the iron sector in the Kingdom in three main areas; the large expected demand from various sectors in the local market, the Kingdom's geographic location, and its competitive advantages qualify it to be an important region for iron manufacturing, in addition to the country's orientation towards green metal production. He continued, "Our estimates indicate that the iron ore reserves in the country are less than one billion tons, and of high quality and concentration."

The "Saudi Vision 2030" has outlined a clear path for building a flourishing economy based on diversifying the production base and increasing the private sector's contribution to 65% of GDP, and raising the ratio of non-oil exports to 50% of non-oil GDP. The sectors of industry and mining stand at the heart of this ambition, with the iron sector occupying a strategic position in the market value of manufactured minerals globally, according to Al-Khorayef's speech.