In a move to drive foreign investment in Saudi Arabia, family-owned business conglomerate Abdul Latif Jameel along with Japan’s Kosei Aluminum signed a Memorandum of Association (MoU) with the National Industrial Clusters Development Program (NICDP) to explore the manufacturing of automotive aluminum wheels and components in Saudi Arabia.
The newly formed venture will be the first large scale Saudi-based components manufacturing company producing automotive components to export worldwide. Through the JV a factory will be established by Saudi Arabian Mining Company (MA’ADEN) in the Kingdom—making it a global hub for Kosei.
Though the investment in the new venture wasn’t revealed by either of the companies, the volume of the wheels produced will represent a significant market share. It also aims at generating more employment opportunities in the Kingdom, which saw unemployment surging to 12.9% among Saudis and 6.1% in its general population, according to General Authority for Statistics (GASTAT).
With Saudi Vision 2030, the Kingdom is all-set to diversify its economy shifting its dependence from oil & gas by increasing investments into various sectors. The country aims at boosting its foreign direct investment (FDI) from 3.8% to 5.7% of GDP by 2030.
Last year the Saudi Arabia’s FDI fell to $1.4 billion, down from $7.5 billion in 2016, according to data from UNCTAD World Investment Report that was published early June.
In May this year, Saudi Public Investment Fund (PIF) and Japan’s Softbank launched a $100 billion tech-fund to steer capital into innovative technologies in the US-based startups and other global firms.