Visualizing Industrialization

by shariff mohammed | Jun 24, 2014

Saleh I. Al-Rasheed, Director General of Saudi Industrial Property Authority (MODON) shares his idea of development and industrial progress of the Kingdom with Saudi Commerce & Economic Review.

What are the special programs of MODON to encourage industrial investment of small & medium(SMEs)  investors in the Kingdom, especially in the Eastern Province?   

There is no doubt about the fact that SMEs are the backbone of any economy and it can give sustainable and stable growth for economy. Large scale development of Industrial Cities and Technology zones are based on that assessment and belief that we need to provide support and resources to develop industrial strength of SMEs. The aim is to provide distinctive and unique industrial cities and technology zones of the highest quality throughout the Kingdom. In order to attract more entrepreneurs in to this we have following policies and programs:

  • In order to target budding entrepreneurs and business pioneers we have readymade factories, which will ease the process of starting the business. This will help to divert the focus of investors from construction of the factory and more focused on the business. This is a part of integrated industrial services that we are proving, especially to SME sector. In order to reduce the office work we have kept procedure online and through MODON one can apply for this facility.
  • MODON's innovation award is another strategy to motivate innovation and expansion among the young entrepreneurs. We receive innovative ideas and try to implement in our industrial development strategy. This is to motivate our sons and daughters of the country and bring their ideas to the mainstream. Last year we have awarded three innovators and it has helped us in transforming the idea and another set of innovators will be honored in next month.
  • Finally, we have been organizing industrial forums every year to showcase the opportunities in the industrial cities and technology zones. We invite large number of SMEs to it and they can explore the opportunities and get proper advice from the authorities. Till now we have organized three forums and the last one was conducted at Jeddah in 2013.

According to you why are many entrepreneurs reluctant to enter into industrial projects?

I don't see that reluctance now and recent figures shows different story. Huge number SMEs are coming forward to set up industrial projects, there are huge demand from them. As the demand is increasing, the facilities have been expanded. Number of industrial cities have gone up from 14 to 32 in 2013 and the number of factories from 1950 in 2007 to 5400 in 2013, in which majority of them are from SME sector. We have seen steady growth in industrial projects in SME sector.

At present what are the challenges that you see for those SMEs that are looking for investments in the Industrial Cities?

There are many challenges, but an entrepreneur who is serious and comes with wealth of knowledge can overcome any challenges. One should understand the ground reality and should be able understand the market demand. One should have strong foundation to run an industry and look for long term gain. Many fails because they look at short term gain. Industrial projects can be started only those who have long term gains and vision. They need to utilize knowledge base and information available to understand the market requirement and the knowhow of  the new technology. They have to realize that break even period of industries are longer than service and trading sector. They need to unite all levels of files and ranks.

Don’t you think MODON should provide small industrial cities closer the town, especially for small industrial projects?

As I told you in the beginning, MODON has already put in place ready factories to attract more and more SMEs into this sector. These ready factories are suitable midsize labs and first stage factories. We have more than 300 ready factories with 900 square meter and MODON is constructing 450 sq meter size ready factories in all the Industrial cities and in future even we have plan to build 200 sq meter ready factories to attract small investors.

In case of closure of factory because of internal or external reasons, does MODON have any mechanism to help them? If Yes what are the solutions you offer?

There are many problems that project face, some face in the initial stage, some face post production and many face once they take their product to the market. We do study and follow-up of the growth and development of all the projects and whenever we see it's in problem we do give suggestions to correct and give proper solution to it. It's not limited to grants and pay offs. The MODON also gives resources and mechanism overcome challenges.  We also introduce them to different financial agencies if they are facing financial crunch. We have many consultancies working with whom we use in such cases and give better advice and open up better market for the products.

What are the other offers that MODON provides in custom duty exemption for import and export?

Customs exemption are not under the jurisdiction of MODON, rather it's with Ministry of Commerce & Industry . Having said this it  is playing vital role in helping Saudi industries by giving lots of exemptions. The locals can import machinery for the factory with very low tax rates. The exemption is available for raw materials. There are many subsidies for the industrial project.

How do you see the prospectus of Saudi entrepreneurs?

The young Saudi male and female entrepreneurs are energetic and visionary. Most of them have clear vision about their goal and they are trying to catch the best industrial practice achieve their goal. If we look at the number of young entrepreneurs who have entered the market in last five years, its huge and majority of them are successful in their ventures, this is shows that we have enormous potential and little push to it will deliver best results. And the Saudi women have achieved extraordinary growth in last couple of years, they have proved their metal in service sector and today they are in all the sectors. Looking at their enthusiasm the MODON has decided build industrial city exclusively for them at Al-Hasa.  This will bring many more women to this industry and many new entrepreneurs will enter into the market. Women are essential part of economic development and we are committed to create apt industrial ecology for them. All the government agencies are working together to achieve the goal set by the government, which is industrializing the economy and  bring back the culture of entrepreneurship to the Kingdom . I would urge all young people of this country to utilize all the opportunities and come forward with innovative ideas on which the country would like to move ahead.

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