In a strategic move aimed at boosting local content and supporting the industrial sector in Saudi Arabia, Arabian Plastics Industries Company (APICO) announced the signing of two significant Memoranda of Understanding (MoUs). The first MoU targets the localization of manufacturing for ventilation and air conditioning products, while the second focuses on establishing a factory specializing in the production of expanded polypropylene (EPP), representing a significant boost to the company's expansion plans and future aspirations.
General context and objectives of Vision 2030
These agreements are part of broader national efforts spearheaded by Saudi Vision 2030, which prioritizes economic diversification and the development of non-oil industries. The “Made in Saudi Arabia” program aims to encourage local companies to increase their production capacity and reduce reliance on imports, a goal that ABIC translates into action through these strategic partnerships. Localizing advanced industries not only contributes to achieving self-sufficiency but also strengthens the Kingdom’s position as a leading regional industrial hub, capable of attracting foreign investment and transferring technology and expertise.
Details of strategic partnerships
According to a company statement published on the Saudi Stock Exchange (Tadawul) website, the first memorandum of understanding (MoU) was signed with Air International Thermal Systems. This MoU aims to explore the feasibility of joint cooperation to localize the manufacturing of HVAC (heating, ventilation, and air conditioning) products. The agreement outlines the mutual obligations and rights of both parties and is scheduled to remain in effect until December 31, 2026, or until the signing of a final agreement, whichever comes first.
The second memorandum of understanding was signed with KK Nag Ltd. and focuses on establishing a factory specializing in expanded polypropylene (EPP) products. This lightweight and highly durable material is used in many vital industries, such as automotive manufacturing, packaging, and thermal insulation. The establishment of this factory represents a significant step in APCO's expansion plans to enhance its production capacity and meet the growing demand in local and regional markets. This memorandum is valid until March 31, 2027, or until a final agreement is concluded.
Economic importance and expected impact
These projects are expected to have a multifaceted positive impact. Locally, they will contribute to creating new job opportunities, strengthening local supply chains, and increasing the local content in finished products. Regionally, this step enhances the competitiveness of Saudi products and opens new export opportunities to neighboring countries. Internationally, these partnerships reflect the confidence of global investors in the Saudi business environment and the strength of its economy, paving the way for further cooperation in the future. Localizing these advanced industries is not limited to direct economic benefits; it extends to building a robust and sustainable industrial base for future generations.
