The company’s new investments in Saudi Arabia reflect its confidence that the region will recover from current setbacks and its determination to stay for the long haul
Global innovation firm 3M has broken ground on the first phase of what will by 2020 be its largest manufacturing facility in the Middle East and Africa.
The flagship plant, the US-headquartered company’s first manufacturing investment in Saudi Arabia located in Dammam’s Third Industrial City, will make what 3M describes as “cutting-edge products created from new and innovative projects” and will serve customers both in Saudi Arabia and the wider Middle East and North Africa (Mena) region. The $30 million first phase is expected to be operational by the first quarter of 2017.
The company says its strategic investment will create “sophisticated” job opportunities for Saudi nationals, while transferring knowledge, technology and expertise to the kingdom. By 2020, the site is expected to employ as many as 500 technical personnel, a large percentage of them Saudi nationals.
The 50,000 sq m facility will, says 3M, be built in three phases. By 2020, it is expected to be manufacturing products related to air quality, identity management, oil and gas and corrosion protection as well as products related to infrastructure and healthcare markets. Initially supplying customers in Saudi Arabia, it will become a regional supply source for other countries in the Middle East, Europe
3M’s latest strategic investment in Saudi Arabia comes against a backdrop of low oil prices and tight GCC markets. Speaking at the groundbreaking ceremony, HC Shin, 3M’s executive vice president for international operations, acknowledged the current macroeconomic headwinds but struck a positive note about Middle East prospects.
“Yes, we are going through some setbacks in terms of the oil price, but 3M thinks this will be temporary and that the region, particularly Saudi Arabia, will continue to grow,” he said.
“When 3M decides to go to a country like Saudi Arabia, we go for the long haul. We are looking at five years, 10 years, 15 years down the road in terms of business planning. It’s a strategic partnership – that’s how 3M works with its customers.”
First phase construction will now be accelerated, with a view to starting mass production from spring 2017.
“It is an aggressive timeline,” Shin conceded. “We have to complete the building, bring in equipment, bring in all the processes (including quality control based on 3M standards), start making products and getting them out to customers for test sale and qualification, all ahead of the start of mass production from Q1 of 2017.
“But it is a very exciting time for 3M Saudi Arabia. The new facility will bring more business to 3M, and will create very high quality jobs in Dammam.”
The new facility will complement 3M’s existing presence in the kingdom, which it has served since the 1980s. It has a Technical & Scientific Office, two Customer Experience Centres and a Learning Centre in Riyadh, Jeddah and Dammam. In addition to breaking ground on the new manufacturing facility, 3M executives also recently opened a new R&D centre in Dammam to support its manufacturing functions.
Engineer Saleh Al Rasheed, director general of the Saudi Industrial Property Authority (Modon), which as of the end of 2014 supervised 34 industrial cities in the kingdom (including Dammam’s Third Industrial City), said 3M “will have great positive impacts on the industrial sector’s constant growth and prosperity.”
To date, 3M has not defined a start date or scope for the project’s second phase.
Bruce Hafermeyer, manufacturing manager, 3M Saudi Arabia, and Al Rasheed signed the agreement for the plot that will house the new facility.