Skip to content Skip to Search
Skip navigation

Saudi opening food clusters to boost homegrown supplies

The cluster project aims to see Saudi Arabia improve its food security Creative Commons/Province of British Columbia
The cluster project aims to see Saudi Arabia improve its food security
  • Clusters aim to increase integration and cooperation across supply chain
  • 11 will launch and be home to manufacturers, labs and service providers
  • Saudi currently at 44th place in the 2022 Food Security Index

Saudi Arabia is planning to launch a number of food clusters in an effort to boost its homegrown food manufacturing sector.

Abdulrahman Alromaizan, investment development director at the Saudi Industrial Property Authority (Modon), told delegates during a panel at the Gulfood event in Dubai this week that the semi-government entity was addressing the need to decrease reliance on overseas supplies.

Modon oversees 36 industrial cities across Saudi Arabia.

Alromaizan said it will launch 11 clusters, including one in Jeddah. They will be home to manufacturers, service providers, logistics services, laboratories and ready-built facilities “for the purpose of increasing the efficiency of the factories in the cluster”.

Food clusters are areas devoted to expanding domestic production in a country, increasing integration and cooperation between all parties across the length of the supply chain. They are set up in regions to enhance food security and support the industry at large.

“We anticipate cost reduction per product from 5 to 12 percent by cutting this logistics chain and having integrated services within the cluster,” Alromaizan said.

In the 2022 Food Security Index – which ranked countries according to access to food, crisis risks and resilience of the economy – the UAE was the top-placed Arab country, at 26th.

Qatar was 29th, Bahrain 30th, Oman 41st, Saudi Arabia 44th and Kuwait 47th.

The private sector is “at the heart” of transforming Saudi Arabia’s food processing industry, according to Razan Alaqil, partner and chief advocacy officer at consultancy company Mukatafa.

Saudi’s National Industrial Strategy, which was launched under the Council of Economic and Social Affairs last year, aims to increase the contribution of manufacturing to the country’s GDP to over SAR 895 billion ($238.6 billion) by 2030.

“There is a key focus at a national level by Saudi on food processing,” Alaqil said.

Saudi Arabia’s Ministry of Environment, Water and Agriculture (Mewa) last year announced plans to localise 85 percent of the country’s food industry by 2030.

Dr Ali Al-Sabhan, supervisor general of the Entrepreneurship Department at Mewa said at the time that importing food cost Saudi Arabia SAR 70 billion each year.

“The Saudi government and the Saudi public sector is very keen on ensuring that the private sector is an active partner in developing and working for the future,” added Alaqil.

It was announced this week that Ukraine’s MHP, one of Europe’s largest exporters of chicken, and Saudi Arabia’s Tanmiah Food Company have signed an agreement that aims to improve the kingdom’s food security.

Earlier this month, Saudi’s Public Investment Fund signed a joint venture agreement with AeroFarms, a US sustainable agriculture company, to build and operate indoor vertical farms across the Middle East and North Africa through a newly established company in Riyadh.

Latest articles

Architecture, Building, Convention Center

First Abu Dhabi revenue rises 16% on overseas growth

First Abu Dhabi (FAB), the UAE’s biggest lender, said revenues rose 16 percent year on year to AED15.7 billion ($4.3 billion) in the first half of 2024, driven by 30 percent annual growth in international franchise. Net profit increased 3 percent to AED8.4 billion in the first six month ended June 30, 2024, compared to […]

People, Person, Adult

Diriyah awards $2bn contract for Wadi Safar masterplan

The Public Investment Fund-backed Diriyah Company has awarded its largest single contract to date to a Saudi-Qatari joint venture for the Wadi Safar masterplan. The SAR8 billion ($2.13 billion) contract was awarded to the joint venture between Urbacon Saudi Company, the local unit of Qatar’s Urbacon International, and Saudi-headquartered Al Bawani Company, the state-backed Saudi […]

Adult, Male, Man

Kuwait turns to budget deficit as oil income drops 19%

Kuwait reported a budget deficit of KD1.6 billion ($5.2 billion) in 2023/24 from a surplus of KD6.4 billion in the previous year, the finance ministry said. Oil revenues fell to KD21.6 billion in 2023/24, down 19 percent, compared to KD26.7 billion a year ago, the state-run Kuna news agency reported, citing a ministry statement. The […]

Accessories, Formal Wear, Tie

Turkey repays $5bn Saudi deposit to cut liabilities

Turkey’s central bank has repaid a $5 billion deposit by Saudi Arabia as part of its plan to lower external liabilities. The amount was returned to the Saudi Fund for Development, received in 2023, the central bank said in a statement. “Our external liabilities have recently improved by $7 billion through the reduction of deposit […]