The Ras al-Khair Special Economic Zone offers investors for the MENA region’s largest shipyard and significant maritime hub, with backing from the Saudi government and major industry players Aramco, Lamprell, Bahri, and Hyundai Heavy Industries.

Riyadh, Saudi Arabia, 7 May 2024. – The Ras al-Khair Special Economic Zone (SEZ) aims to host the largest shipyard in the Middle East and North Africa (MENA), leveraging partnerships with major maritime players and backing by the Saudi government to attract investment. The SEZ is based in the city of Ras al-Khair on the eastern Arabian Gulf coast of the Kingdom, just north of al-Jubail Industrial City – home to the world’s fourth largest petrochemical company: Saudi Basic Industries Corporation (SABIC).

The shipyard itself is King Salman International Complex for Maritime Industries and Services, which aims to be both the largest shipyard in the MENA region and the most technologically advanced. Major activities include shipbuilding, repair, offshore rig fabrication and repairing. The shipyard leverages modern technologies like AI and IoT in its bid to drive innovation, in addition to renewable energy sources. The SEZ also includes a fully integrated offshore cluster to localize end-to-end offshore supply chain.

Four entities have been created in the SEZ in pursuit of meeting the region’s increasing demand for maritime applications. The entities, along with their shareholders, are as follow:

• International Maritime Industries (IMI), a joint venture of:
  • The Arabian American Oil Company (Aramco)
  • Lamprell
  • The national shipping carrier of Saudi Arabia, Bahri
  • Hyundai Heavy Industries (HHI)
• Saudi Engines Manufacturing Company (MAKEEN), a joint venture of:
  • The Arabian American Oil Company (Aramco)
  • Hyundai Heavy Industries (HHI)
  • The Saudi Arabian Industrial Investments Company Dussur
• McDermott Arabia Company Limited, Fully owned by McDermott International
• Aramco-Baosteel steel plate plant, a joint venture of:
  • The Arabian American Oil Company (Aramco)
  • Baoshan Iron & Steel Company Limited

This is in line with Ras al-Khair’s proactive approach to seeking diverse partners and investors globally, with multiple incentives promised for both the short and medium term.

These include a 5% corporate income tax for up to 20 years. There will also be 0% customs duties deferral for goods inside the zone and 0% withholding tax for profit repatriation abroad – both indefinite. There will also be 0% VAT for intra-SEZ goods exchanged within the zone and between zones.

IMI already has signed offtake agreements totaling US$10 billion over 10 years with partners Aramco and Bahri, for the delivery of 20 rigs and 52 vessels acquiring at least 75% of Bahri commercial vessel needs over the period from the shipyard.

“This is an exciting time for Saudi Arabia. Projects like Ras al-Khair are spearheading the Kingdom’s drive to become a global investment destination by developing a modern, sustainable maritime and logistics powerhouse.” Eng. Ahmed Hassan (RC CEO of RCMI)

The development of the SEZ and King Salman International Complex for Maritime Industries and Services is designed to contribute to Saudi Arabia’s Vision 2030 by further developing and diversifying the Kingdom’s economy. Saudi Arabia’s economic growth has been among the most robust in the G20 at 7.2% cumulatively since Q4 2019, accompanying steady improvement in its unemployment figures with a rate that has just dipped below 5%. The SEZ aims to reach a maritime industry target value of US$14 billion annually and create over 80,000 direct and indirect jobs while attracting investment from around the world.