Industrial Cities

The Kingdom's policy for ensuring the growth of the non-oil industrial sector focuses on establishing industries that use the country's abundant and inexpensive supplies of petroleum products, petrochemicals and minerals. Petrochemical and other oil-based industries were concentrated at new industrial cities. These plants use natural gas and natural gas liquids that were previously flared, as well as refined products from the oil industry to manufacture products that would in turn feed non-oil industries. Concentration on industrial plants in specific areas also facilitates the provision of vital support services, such as water, power and transportation.

Industrial cities have been built, scattered across the Kingdom. These sites were chosen for their proximity to sources of raw materials and ease of access to major domestic and international consumer markets. All have been built with emphasis on environmental and wildlife conservation. The two principal industrial cities are Jubail on the Arabian Gulf and Yanbu on the Red Sea. Jubail, the largest, accommodates tens of thousands of workers in its many industrial facilities, and has a dedicated desalination plant and its own busy seaport. It also boasts a vocational training institute and a college. Yanbu also has its own port, from which products manufactured in the Kingdom are exported. It has refineries, a petrochemical complex and many manufacturing and support enterprises.

The Saudi Arabian Basic Industries Corporation (SABIC) plays a central role in encouraging private sector participation in the nation's economic growth. Established in 1976 by the government as a shareholding company with an initial capital of 2.7 billion U.S. dollars, SABIC now has an invested capital of close to 30 billion dollars. It is owned 70 percent by the Saudi government and 30 percent by shareholders from the six Gulf Cooperation Council (GCC) countries. SABIC quickly became the backbone of Saudi Arabia's successful industrialization. By 1994, it had 15 major plants operating in Jubail, Yanbu, and Jeddah, with an annual production of 13 million metric tons.  By 2002, total production was 40.6 million tons of basic and intermediate chemicals, polymers, plastics, industrial gases, fertilizers, steel and other metals; this figure is expected to exceed 48 million tons by 2010.

Some of these products are sold on domestic and international markets, and SABIC's net revenue from sales during the first half of 2003 reached 850.7 million U.S. dollars, an increase of 224 percent over the previous year's figures.  Other SABIC products are used as feedstock by secondary and support industries to produce consumer goods. These industries, all owned and operated by the private sector, produce a variety of consumer and industrial goods.