Riyadh, Saudi Arabia Rob L. Wagner (The Media – Not content with oil, the kingdom would like to create vehicles because well; skeptics abound.
Two years ago, the Saudi Arabian government announced with remarkable fanfare – plus was met with certain skepticism – plans to manufacture car components by 2013 plus assemble vehicles by 2021. King Saud University technology pupils, whom crafted an affordable sport utility car called the Ghazel, bolstered those plans with a real car prepared for creation.
Saudi financial analysts are optimistic which vehicle production inside the kingdom may enable minimize the economy’s reliance about oil exports. Yet roadblocks persist. Already the objective to manufacture auto components upcoming year is within jeopardy because infrastructure along with a trained work pool are not inside area. It begs the query of whether Saudi Arabia could pull off a huge undertaking in its stated timetable or come close into it.
“It’s not realistic,” Asaad Jawhar, an economics analyst plus professor at Jeddah’s King Abdulaziz University, told The Media Line. Jawhar claims production vehicle components is a bit more probably to receive underway in five years.
Saudis love their vehicles, buying an estimated 800,000 inside 2011 with an expected 1 million vehicles to be purchased yearly by 2020. The Petroleum plus Minerals Ministry as well as the Commerce plus Industry Ministry are investing inside analysis plus development, shape, car assembly plus infrastructure to create enough exports to aid the kingdom wean itself from oil profits.
The ministries initiated the National Industrial Clusters Development System to aid achieve those diversification objectives by concentrating about five industries: vehicle production, solar vitality, plastics, house products plus minerals processing.
The many ambitious challenge is building vehicles.
Fayez Al-Sharef, chemical project director for Saudi Aramco, told Bloomberg News inside October which he expects the nascent Saudi automotive industry to eventually create 100,000 jobs plus provide a half-million vehicles each year.
If the vision of self-sufficiency from diversification sounds familiar, it’s considering Saudi Arabia has been down which road before plus failed.
Saudi Arabia has been lookin because the 1970s for the magic export product which may reduce its dependency about oil. The government implemented an ambitious program to develop its agricultural industry to become self-sustaining plus supply each Saudi home with food grown in its borders.
Production of wheat plus sift rose gradually, yet thus did the pricey proposition of building irrigation systems to bring groundwater to the crops. Between 1984 plus 2000, Saudi Arabia invested an astronomical $ 83.6 billion to irrigate crops plus build agricultural infrastructure. The project cost over twice it might need to import foodstuff, based on the School of Oriental plus African Studies at King’s College London.
But, the 1991 Gulf War place a serious stress found on the Saudi budget plus groundwater – its supply inside the desert constantly an matter – was increasingly difficult to bring to the surface. Efforts to keep irrigation of 1.12 million hectares, the level irrigated inside 2000, is virtually an impossible task. The project couldn’t be sustained.
“The most crucial thing wasn’t to depend seriously about oil, however, to depend about farming plus they (Saudi government) failed inside farming,” Jawhar claims. “And now they are striving to locate another means of changing technologies.”
There are signs which creating an automotive industry might function. During the 3rd quarter of 2011, non-oil exports rose by 34 %, largely inside petrochemicals plus plastics, based on the Saudi General Statistics Department. China was the largest customer of these goods.
Didier J. Vigouroux, vice-president of the Automotive Cluster for the National Industrial Clusters Development System, told The Media Line a Saudi automotive industry is capable of matching petrochemicals plus plastics because worthwhile exports.
“Nobody is considering providing up oil plus fuel, nevertheless to diversify from oil plus fuel,” Vigouroux claims. “And petrochemicals are a logical continuation. New industries like car production might target the achievement of petrochemicals plus plastics because a objective.”
The brightening pic inside exports lays the foundation for developing components production vegetation plus eventually automotive assembly. Isuzu Motors Ltd. has an assembly plant inside Dammam for medium- plus heavy-duty pickups. The plant is expected to start this year to make regarding 25,000 cars yearly for export to Asia.
Vigouroux claims any timetable to bring additional vehicle assembly vegetation online is flexible.
“The just true assembly plant project inside Saudi Arabia is the Isuzu plant, yet because far because developing different vegetation you continue to be chatting to certain firms,” he claims.
After its unveiling of the Ghazal sport utility car, King Saud University inked an agreement with all the South Korean technology business Digm Automotive Technology to develop a vehicle priced beneath $ 10,000. Saudi Arabia might export the auto to neighboring Gulf nations plus North Africa.
Jawhar claims which producing inexpensive vehicles makes sense. “Saudi Arabia must approach this step-by-step like Hyundai. They may succeed when they model following Korea. Korea produced little plus bad vehicles at initial, yet is today doing perfectly,” he states. “By initially producing [cheap] vehicles effectively, they then build an organization.”
He notes, still, which exporting the Ghazal, or perhaps a synonymous inexpensive vehicle, wouldn’t be competitive inside foreign markets, however, market greater domestically. “Perhaps there’s a marketplace inside Africa, however, even there I’m not certain.”
But, the slow begin to receive the fledgling industry from the gate might not just scuttle the 2021 timetable for vehicle creation and doom Saudi Arabia’s diversification plans.
While the Saudi government is financing creation plus logistics facilities by 20-year financing inside the remote areas of Najran plus Tabuk, the query remains whether companies could discover competent Saudi work. The government’s Nitaqat system demands which firms with over 3,000 employees should employ Saudis for 20 % of its staff.
A Saudi technology consultant, whom asked to not be diagnosed considering he is not authorized to talk for his customer, told The Media Line it will be difficult to fill factory jobs with Saudis.
“With Nitaqat, assembly vegetation must fill unskilled work positions with Saudis plus I don’t see which happening,” he claims. “Which brings you back to how you usually do elements, plus that’s hiring inexpensive foreign work.”
Jawhar states acquiring Saudis inside the experienced work marketplace is another story. “The planet doesn’t learn which Saudis are understanding swiftly,” he claims. “Saudis between 20- plus 25-years-old with technology knowledge is producing wonderful vehicles with excellent technologies 20 years from today.”
Vigouroux agrees. “The proper attitude to place about diversification is the substantial want to create work for young Saudis coming from colleges,” he claims. “This signifies creating modern curriculum as well as the proper types of training plus function ethic.”
However Vigouroux recognized which for 2012 Saudi Arabia’s automotive production infrastructure is minimal, though the knowledge for developing automotive zones is accessible. “We are addressing investment issues plus there certain impressive botanical parks inside Yanbu plus Jubail where there is absolutely an expertise for mapping plus running commercial cities.”
The key to overcoming infrastructure plus work issues is greater cooperation between agencies. Jawhar noticed a effective automotive industry depends about 2 groups which historically have completed a bad job developing marketable exports: the government plus private company.
“If the government heads this they may fail as well as the private sector has not taken [automotive manufacturing] really,” Jawhar states. “It’s a matter of trust between your 2 fields which determines the result.”
Category: Manufacturing And Engineering
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