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Saudi developer Roshn prioritises local sourcing

Saudi Arabia's construction giga-projects, part of its Vision 2030 strategy, are vulnerable to global supply chain problems Reuters/Faisal Al Nasser
Saudi Arabia's construction giga-projects, part of its Vision 2030 strategy, are vulnerable to global supply chain problems
  • Builder sets 60% target
  • Supply chain ‘fragility’
  • Most steel imported

Saudi developer Roshn says it is increasing its local sourcing of building materials to manage global supply chain problems. 

“We’re working on a target at the moment of trying to locally source around 60 percent of our construction activities within the kingdom,” CEO David Grover told Al Arabiya TV on January 14. 

“For us it’s about recognising the fragility of the supply chain… and working with different ministries to help local companies grow so that we become as a country more independent of the global supply chain than Saudi is at the moment,” he added. 

International maritime trade has been disrupted by attacks on Red Sea shipping by the Yemeni Houthi group, forcing shippers to go around the Cape of Good Hope and leading many companies to find alternative suppliers. 

Supply chains were also hit over the past four years by the Covid-19 pandemic and the war in Ukraine. 

Most of the iron and steel used in Saudi Arabia’s giga-projects is sourced from abroad. 

The government is trying to develop its mining industry for rare and other metals. It says estimated untapped mineral wealth has almost doubled in nearly a decade to $2.5 trillion, based on exploration of only 30 percent of the kingdom’s mineral region. 

The mining ministry has created a $182 million fund to encourage exploration, and is now offering companies far larger tracts of land to explore per licence. 

Roshn is one of the five Public Investment Fund-owned companies managing the giga-projects at the heart of Saudi Arabia’s economic reform plans to diversify away from oil. 

It is developing a luxury residential district called Alarous in north Jeddah which includes a man-made canal, as well as the Sedra and Warefa residential districts in Riyadh and Alfulwa near Hofuf in the Eastern Province.  

Grover said construction of the Jeddah canal would begin this month, and that new developments would be announced this year in Mecca and Dammam.

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