The industry occupies a pivotal position in the Saudi financial market, serving as one of the core pillars of the Kingdom's Vision 2030 aimed at diversifying national income sources and reducing dependence on oil. In recent years, the industrial sector in the Saudi financial market has witnessed significant growth, supported by ambitious government policies and various investment incentives. The industry includes companies operating in fields such as petrochemicals, cement, food industries, electronics, and heavy equipment, making it a diverse and vital sector in the main market index, "Tadawul". During 2024 and 2025, market data indicated that the industry contributed up to 25% of the non-oil GDP, with the number of factories rising to nearly 19,000 by mid-2025. Notable companies like SABIC and National Industrialization achieved growth in revenues and net profits, reflecting the sector's dynamism and increasing strength in the Saudi market. In this article, we provide an extensive and in-depth overview of the industry in the Saudi market, analyzing financial performance, key players, challenges, and opportunities, while reviewing the latest financial indicators and technological and regulatory developments that have shaped this vital sector.
Understanding the Industry in the Saudi Financial Market
In the context of the Saudi financial market (Tadawul), the industry refers to the large group of companies engaged in various manufacturing sectors, alongside chemical, mineral, food, and electronic industries. The industrial sector includes companies specialized in producing petrochemicals, fertilizers, cement, and metals, as well as light industries such as food, packaging, and heavy industrial equipment. This sector is one of the most diverse in the market, combining large global companies like SABIC with medium and small enterprises focusing on local or specialized industries. The industry emerges as a key tool for achieving non-oil economic growth, creating new job opportunities, and developing local industrial technologies in the Kingdom.
The Importance of the Industry and Its Role in Saudi Vision 2030
The importance of the industry lies in its role as a fundamental driver of the Kingdom's new economic strategy. With the launch of Vision 2030, the industrial sector's position has been strengthened as a core element in diversifying national income sources. The state aims to raise the industry's contribution to non-oil GDP to record levels, while increasing the localization of industrial activities and enhancing non-oil exports. The government supports industrial companies through financial and incentive programs, updating industrial infrastructure, and facilitating procedures and licenses to encourage local and foreign investments. Vision 2030 also aims to transform the Kingdom into an advanced regional industrial hub in several fields such as petrochemicals, electric vehicle manufacturing, and advanced technologies, thereby enhancing future growth opportunities for the industry.
Components of the Industry: Sub-Sectors and Key Activities
The industrial sector in the Saudi market consists of several sub-sectors, each with its own weight and significance. Among the most prominent of these sectors are petrochemicals (including the production of basic chemicals, plastic compounds, and fertilizers), cement manufacturing (serving the construction sector), food industries (canning, processing, packaging), metal industries (iron, steel, aluminum), electronics manufacturing, as well as heavy and light industrial equipment. The industry also includes supporting industrial service companies such as spare parts supply and maintenance. This diversity enhances the sector's resilience, making it less susceptible to sudden market fluctuations, with each sub-sector able to benefit from its own growth opportunities.
Financial Performance of the Industry in 2024–2025: Figures and Indicators
The industrial sector witnessed significant growth in key financial indicators during 2024 and 2025. The Purchasing Managers' Index (PMI) for the non-oil industrial sector rose to about 59 points in November 2024, indicating an acceleration in growth. Listed industrial companies on Tadawul recorded an annual revenue increase exceeding 10% compared to 2023, the highest growth rate since 2019. The industry's contribution to non-oil GDP rose to 25% in 2024. In terms of dividend distribution, the cash dividend yields of major companies (such as SABIC) ranged from 8% to 9%, with price-to-earnings (P/E) ratios stabilizing between 5 and 10 times for many large industrial companies. Data shows that the industrial sector managed to achieve stable quarterly growth in profits and revenues during the second half of 2024 and into early 2025, supported by rising domestic demand and increased non-oil exports.
Key Players in the Saudi Industry
The Saudi industrial sector includes major companies that play a pivotal role in the market. Among the most prominent of these companies are the Saudi Basic Industries Corporation (SABIC), the largest petrochemical manufacturer in the Middle East, and National Industrialization Company (Tasnee), specializing in agricultural chemicals and metal industries. Cement companies such as Riyadh Cement and Saudi Cement also play a significant role in meeting the needs of the construction and building sectors. The list also includes companies like Ma'aden (mining and metals), Hadeed (steel), and Yanbu National Petrochemical Company (Yansab). In addition to these companies, there are emerging and medium-sized firms in the food and electronics industries, as well as newly listed companies in the parallel market, reflecting the broad and diverse base of the industry in the Saudi financial market.
Analyzing the Challenges Facing the Industry
Despite continuous growth, the Saudi industrial sector faces several fundamental challenges. The first is its relative dependence on global energy and raw material prices, making it susceptible to fluctuations in international markets. Additionally, disruptions in global supply chains, rising shipping costs, or delays in the arrival of raw materials affect the stability of industrial production. Competitive pressure from cheaper imported products and rising compliance costs with environmental and regulatory standards in the Kingdom also pose challenges. Furthermore, the challenge of providing skilled labor locally persists, as the industry requires specialized skills that are still in the process of localization. The government continues to address these challenges through training programs, financial incentives, and updates to environmental and safety regulations.
Growth and Innovation Opportunities in the Industry
The Saudi industry is characterized by promising growth opportunities, especially with government support for localizing production chains and industrial technologies. These opportunities include investment in advanced industries such as semiconductors, renewable energy, and electric vehicle manufacturing, where the Kingdom has recently formed strategic partnerships with global companies to localize these industries. The increasing demand from infrastructure projects and industrial tourism also presents new opportunities for local companies. The government supports investment in large industrial complexes, streamlining procedures, and providing low-interest financing for small and medium-sized factories. These initiatives contribute to enhancing the competitiveness of the Saudi industry at both local and international levels.
Government Initiatives to Support the Industry and Localize Technology
The Saudi government places significant emphasis on developing the industry through a series of strategic initiatives. Among the most notable is the National Industrial and Logistics Program (NIDLP), which aims to enhance the industry's contribution to national output and increase non-oil exports. The state provides investment incentives, such as tax reductions and financing facilities, along with the establishment of specialized industrial zones in Jubail, Yanbu, Jeddah, and NEOM. It also supports the localization of defense, electronics, pharmaceutical, and mining industries, including partnerships for technology transfer with global companies. The Ministry of Industry is working to update production standards, encourage innovation, and provide advanced training programs for national workforce.
Impact of External Factors on Industry Performance
The Saudi industry is influenced by several external factors, most notably fluctuations in oil, gas, and metal prices in global markets. These fluctuations lead to changes in production costs and profit margins, especially in energy-intensive industries. Global economic conditions, such as inflation rates, exchange rates, and supply chain disruptions, also play a role in determining the demand for Saudi industrial products. Additionally, international trade policies and tariffs affect the competitiveness of industrial exports. Some companies face challenges in obtaining advanced technologies or raw materials due to trade restrictions or international disputes. Therefore, adapting to external changes is a critical factor for the sustainability of industry growth.
Latest Technological Developments in the Saudi Industry
The Saudi industrial sector has witnessed rapid technological developments over the past two years. Among the most notable is the expansion of Internet of Things (IoT) and Artificial Intelligence (AI) technologies in factory management and improving production efficiency. The introduction of 5G technology in some smart manufacturing facilities has contributed to increased connectivity speed and monitoring accuracy. Major companies have begun adopting automation systems and industrial robotics, as well as advanced manufacturing technologies (Additive Manufacturing). The government has launched massive projects for semiconductor and electronic chip manufacturing in partnership with global companies, as part of plans to transform into a regional hub for advanced technology manufacturing. These developments enhance the Saudi industry's ability to compete globally and open new horizons for innovation and growth.
Analyzing Financial Valuation Indicators for Industrial Companies
Industrial companies in the Saudi market exhibit financial valuation indicators that reflect the cyclical nature and diversity of the sector. The price-to-earnings (P/E) ratio for most major industrial companies ranges between 5 and 10 times, which is moderate compared to other sectors such as retail or telecommunications. Meanwhile, cash dividend yields range from 3% for smaller cement companies to over 8% for major petrochemical companies like SABIC. Revenue and profit growth rates show stable annual rates, with significant increases in some companies benefiting from expanding domestic demand or exports. Investors should monitor the financial indicators announced by companies and compare them with historical rates and regional peers to form a comprehensive picture of the industry's performance.
The Role of the Industry in Achieving Economic Sustainability
The industry plays a pivotal role in enhancing the economic sustainability of the Kingdom by contributing to non-oil growth and providing job opportunities. Government policies encourage investment in environmentally friendly industries such as renewable energy and recycling, supporting the transition to a circular economy. Major industrial companies commit to environmental, health, and safety standards, working to reduce emissions and improve energy efficiency. These efforts contribute to balancing economic growth with environmental protection and support the Kingdom's position among sustainable global industrial economies. The industry emerges as a strategic sector for achieving sustainable development goals in the Kingdom.
The Future of the Industry in Saudi Arabia: A Forward-Looking Perspective
Forecasts indicate that the Saudi industry will continue to grow in the coming years, driven by ongoing government investments, the adoption of modern technologies, and expanding domestic and global demand for industrial products. The industry is expected to benefit from new projects in areas such as electric vehicle manufacturing, medical technologies, and renewable energy. Opportunities for expansion in international markets will remain, especially with increased non-oil exports and partnerships with global allies. However, the sector still needs to continue developing national competencies, improving infrastructure, and enhancing innovation to ensure its competitiveness and sustainable growth in the future.
الخلاصة
The Saudi industrial sector represents a fundamental pillar in the Kingdom's economic transformation journey, combining significant growth opportunities, a pivotal role in achieving Vision 2030, and challenges posed by global changes. The industry has demonstrated strong performance in terms of revenue and profit growth and dividend distributions in recent years, with ongoing government support through various initiatives and funding programs. At the same time, the sector faces challenges such as fluctuations in raw material prices, regulatory pressures, and the need for the Saudi market to develop more technical and managerial competencies. For investors and interested parties, the SIGMIX platform provides accurate analyses and up-to-date data on the performance of the industrial sector and listed companies, helping to understand market dynamics and objectively assess opportunities and risks. It is always advisable to consult a licensed financial advisor before making any investment decisions to ensure alignment with personal financial goals and market variables.
الأسئلة الشائعة
The industry in the Saudi financial market refers to companies engaged in manufacturing, chemical, mineral, food, electronic, and heavy equipment industries. The sector includes companies like SABIC, National Industrialization, and cement and petrochemical companies. The industrial sector is one of the key pillars for diversifying the national economy and significantly contributes to the Kingdom's non-oil GDP, comprising companies with diverse activities serving construction, agriculture, infrastructure, and modern technologies.
The Saudi industrial sector recorded moderate growth during the 2024–2025 period. The industry's contribution to non-oil GDP rose to 25%, and the number of factories increased to about 19,000. Listed companies in the Saudi financial market experienced revenue growth exceeding 10% compared to the previous year, achieving good profits and high cash distributions. Financial indicators show stable P/E ratios and dividend yields in most major industrial companies.
Prominent companies in the Saudi industry include SABIC (Saudi Basic Industries Corporation), National Industrialization (Tasnee), cement companies like Riyadh Cement and Saudi Cement, Ma'aden (mining), Hadeed (steel), and Yanbu National Petrochemical Company (Yansab). The list also includes emerging and medium-sized companies in areas like food and electronics, as well as newly listed companies in the parallel market.
Saudi Vision 2030 has contributed to enhancing the industry's position as a key sector for diversifying national income sources. The strategy aims to increase the industry's contribution to non-oil GDP, localize industries, enhance innovation, and boost non-oil exports. The government provides investment incentives, targeted support programs, and infrastructure development, contributing to attracting local and foreign investments and sustainably growing the sector.
The industry is influenced by several key factors including global energy and raw material prices (such as oil, gas, and metals), domestic and global demand for industrial products, supportive or regulatory government policies, technological developments, competition from imported products, and global economic conditions such as inflation and exchange rates. Supply chain fluctuations and available technical competencies also impact the performance of industrial companies.
Industrial companies are generally more volatile than mature sectors like telecommunications or consumer services. P/E ratios typically range between 5 and 10 times, which are moderate levels reflecting the cyclical nature of the sector. Cash dividend yields tend to be relatively high, especially in petrochemical and cement companies. It is advisable to compare financial indicators of industrial companies with their historical rates and regional peers for a comprehensive assessment.
The Saudi government offers various support programs for the industry, most notably the Saudi Industrial Development Fund, which provides low-cost financing for industrial projects, the National Industrial Standards Center program, and investment incentives in industrial zones. There are also initiatives for localizing modern technologies, training and qualifying the industrial workforce, and easing procedures and taxes for certain national priority industries such as defense and renewable energy.
Key risks include fluctuations in raw material and energy prices, changes in regulatory and environmental policies, competition from imported products, global supply chain disruptions, and cyclical fluctuations in the global economy. Changes in exchange rates and the level of domestic or global demand can also affect the performance of industrial companies. It is important to monitor financial and economic reports and stay updated on market developments regularly.
Growth opportunities in the industry can be evaluated by monitoring revenue and profit growth indicators, the company's competitive position, the level of adoption of modern technologies, geographic or sectoral expansion plans, government incentives, and developments in global markets. Assessing how companies benefit from national infrastructure projects, localizing new industries, and the reliance on exports can ensure sustainable growth in the long term.
Innovation and modern technologies play a crucial role in enhancing the competitiveness of the Saudi industry. Investments in AI, IoT, and smart manufacturing technologies have improved production efficiency and reduced costs. Partnerships with global companies contribute to the transfer and localization of advanced technologies such as semiconductor manufacturing, opening new growth horizons and enhancing the sector's ability to face global challenges.