The Saudi government has provided $269.22 billion in loans to the industrial sector by the end of the April-June period of 2014, Arab News reported.
The loans were distributed among the 6,751 factories registered in the Kingdom, which are distributed in 23 industrial activities employing some 905,400 workers.
Petrochemical and chemical products' sector received the lion's share of government-supported loans at $122.29 billion, amounting to 45.3 percent of the total of the loans.
The refined oil products followed with $36.94 billion, the non-metallic mineral products at $24.28 billion then basic metals at $19.93 billion and finally the food industries at $14.66 billion and the beverages at $11.40 billion.
Meanwhile, non-metallic mineral products industries had the highest number of factories within the government-financed activities at 1,366 factories, followed by fabricated metal products at 926, plastics products at 840 and food industries at 716 factories.
The petrochemicals sector is the largest non-oil sector in KSA. Saudi Arabia is the world’s 11th largest petrochemicals supplier, accounting for 7-8% of the total supply. While the nation’s current strengths lie in the production of basic petrochemical building blocks such as ethylene and methanol, there are plans to diversify its petrochemical portfolio into more complex, distinctive products such as specialty chemicals and engineering thermoplastics. At the same time, Saudi Arabia is investing in raising its world petrochemical market share profile to 13-14% by 2010.
The petrochemicals market enjoys very encouraging regional and global demand trends. With global growth driven by industrial activity in emerging markets, the petrochemicals sector has enjoyed strong utilization rates and firm pricing trends. Local end markets such as automobiles, construction, plastics and appliances are showing strong growth as the economy continues its rapid expansion.
Meanwhile, Saudi Arabia’s accession to the WTO and unbeatable geographic position give exporters excellent access to buyers across Europe, Asia and Africa in an industry frequently driven by proximity to market. Saudi’s competitive advantages in global logistics will only be enhanced as new infrastructure projects come online, including major investments in seaports, airports, roads and railways.
With the world’s largest proven oil reserves and a strategic location at the center of east-west trade, Saudi Arabia is set to become a strategic hub for the expanding petrochemical industry. Newer, large-scale facilities, particularly ones with competitive feedstock supplies, are expected to enjoy a competitive edge over the coming years. A number of highly integrated refining and petrochemical investments are expected to leverage Saudi Arabia’s national competitive advantages in coming years.
Historically dominated by 70% state-owned petrochemical giant Saudi Basic Industries Corporation (SABIC), KSA’s petrochemical sector is gaining momentum from private sector participation. In a paradigm shift, KSA is now actively encouraging private investment in the sector in order to bolster its status as a global petrochemical leader and to diversify towards value-added specialty chemicals, formulated products, and performance polymers. As a result, private-sector contribution to the sector is expected to quadruple in the next ten years.
