Ras Al-Khair Special Economic Zone’s strategic location, technological innovations, and wide-ranging physical and human resources will place investors at the forefront of the Offshore Industry

Al Jubail, 18 April 2024. Saudi Arabia’s Ras Al-Khair SEZ, the newest Special Economic Zone in the Gulf, has unveiled significant investment opportunities in its thriving Offshore Cluster, a pivotal component of the SEZ’s economic growth strategy, as it positions itself to become a leading regional player in the Middle East.

Operated by the Royal Commission for Jubail and Yanbu – Ras Al-Khair SEZ is inviting local and foreign investors to explore the wealth of opportunities on offer to propel the growth of the Kingdom’s maritime and Offshore Cluster sectors as the country strives to diversify its economy in line with its Vision 2030 strategy.

At the heart of the Ras Al-Khair SEZ’s rapid growth strategy is the Offshore Cluster, a unique and integrated ecosystem that offers investors and companies the opportunity to grow their business in a sustainable way and be part of a trailblazing model on a global scale.

Ahmed M. Hassan, The CEO of Ras Al-Khair City for Mining Industries, said: “The Offshore Cluster within Ras Al-Khair is an attractive proposition for investors and businesses looking to be part of the region’s offshore industry revolution. Ras Al-Khair SEZ’s Offshore Cluster is already pioneering a global transformation in the sector, standing at the forefront of major global and technical shifts.”

Businesses setting up operations in Ras Al-Khair SEZ’s Offshore Cluster benefit from a central location, an integrated supply chain, the flexibility to expand organically in line with major trends in offshore and steel production, such as recycling and energy efficiency, and to adapt operations for evolving downstream industry technologies and markets, all while creating significant job opportunities along the way.

Ras Al-Khair SEZ’s transport connectivity, flexible regulations to attract talent and range of investment incentives, such as a 5% corporate income tax rate for up to 20 years and a permanent withholding tax for any profits repatriated from the SEZ, also offer a key advantage for companies investing in the Offshore Cluster.

“Saudi Arabia is nurturing its Maritime and Offshore Cluster support industry ambitions to localize end-to-end supply chains and create a docking hub for regional ship repairs and maintenance. Local and foreign investors wanting to be a part of this development will not only play a key role in accelerating innovation within the sectors, but also deliver a huge boost to the local and national economy”, said Ahmed M. Hassan.

Ras Al-Khair SEZ’s optimized plot locations and extensive transport links enable the smooth movement of materials from port, to SEZ, to export destination, all with a minimal carbon footprint. In addition, there is flexibility for growth in a non-competitive environment. Typically one facility of each type or sub-type is located within the Offshore Cluster, along with access to critical materials and inventory, and a wealth of human talent. All these features add to the attractiveness of the SEZ’s Offshore Cluster.

Companies investing in Ras Al-Khair SEZ’s Offshore Cluster will not only play a key role in driving Saudi Arabia’s ambition to develop a state-of-the-art maritime and Offshore Cluster support industry but also help to propel the sectors across the Middle East. Ras Al-Khair’s SEZ Offshore Cluster is expected to provide significant contributions to regional Foreign Direct Investment (FDI)/ and Gross Domestic Product (GDP). The SEZ has already contributed a Joint venture of Saudi Aramco with Baoshan Iron & Steel Co. Ltd. (Baosteel) to build a steel plate plant reaching a capacity of 1.5 MTPY to supply the King Salman International Complex for Maritime Industries and Services.

As one of the largest oil-producing countries in the world, Saudi Arabia’s offshore operations will remain prominent as global oil demand ramps up with expectations it will reach 105.7 million of barrels per day (mb/d) in 2028, up 5.9 mb/d compared with 2022 levels, according to the International Energy Agency. In addition, the Kingdom’s well-established steel industry is playing a pivotal role in Saudi Arabia’s growth and diversification efforts, with SAR 35 billion invested in three new steel projects in 2022 with a combined capacity of 6.2 million tons.

Growing oil demand, a flourishing steel industry and the global energy transition will all ensure Ras Al-Khair SEZ’s burgeoning Offshore Cluster will continue to play a vital role in driving Saudi Arabia’s, and the wider region’s economic prospects.

As the Offshore Cluster opens its doors for fresh investment and talent, it plans to support strategic growth of the SEZ’s Maritime industry, which includes shipbuilding and repairs, offshore platforms and drilling rigs, and Maritime value chains. Areas of focus include primary steel fabrication for IMI feedstock, downstream steel, and supply chain fabrication, and support facilities for the sector.

The SEZ’s state-of-the-art facilities, technological innovations, and strategic location on the east coast of Saudi Arabia is already driving economic development in the region by attracting local and foreign investments. Building on this momentum will not only add a further boost to the Kingdom’s diversification drive but also will create job opportunities and make a sizeable contribution to the expansion of the Maritime and Offshore Cluster sectors. In summary, the Ras Al-Khair SEZ is expected to enhance the overall growth of Saudi Arabia’s dynamic regional economy.