In a strategic move aimed at strengthening its position in the energy-supported industrial services sector, the board of directors of the Arabian Pipe Company announced its formal approval of a project to establish a specialized factory for the production of drill pipe fittings. This decision was made during the board meeting held on December 24, 2025, and the new factory will be constructed within the company's existing complex in the Second Industrial City of Riyadh.
Project details and timeline
According to a statement released by the company on the Saudi Stock Exchange (Tadawul) website, the estimated cost of the project is approximately SAR 30 million, with a planned production capacity of 50,000 units annually. The company outlined the project's timeline, anticipating that construction and outfitting work will commence in the first quarter of 2026, immediately upon obtaining all necessary licenses and regulatory approvals from the relevant government authorities.
Regarding the financial aspect, “Arabian Pipes” affirmed the strength of its financial position, noting that the project financing will rely on the company’s own resources in addition to other financing sources, and that the implementation work will be assigned to a number of specialized contractors and suppliers to ensure the highest quality standards.
Expected financial and operational impact
The company expects the plant to begin trial operations for approximately three months, with actual commercial production and positive results appearing in the company's financial statements by the second quarter of 2027. This project represents a qualitative addition to the company's product portfolio, as it allows it to diversify income sources and reduce operational risks by entering new production lines with viable profit margins.
The importance of localizing the drilling connections industry
This project is of particular importance given the current economic context of Saudi Arabia, where the oil and gas sector is the primary driver of the economy. Drill pipe joints are critical and precision components in drilling and exploration operations, requiring high engineering standards to withstand the pressures and harsh conditions in wells. Previously, companies relied heavily on imports to meet local demand for these parts, making Arabian Pipes' move a significant contribution to bridging the gap between local supply and demand.
Alignment with the Kingdom's Vision 2030
This expansion is fully aligned with the objectives of Saudi Vision 2030, specifically the National Industrial Development and Logistics Program (NIDLP), which aims to transform the Kingdom into a leading industrial power. The project also supports local content enhancement programs (such as the In-Kingdom Total Value Add (IKTVA) program), as the local manufacturing of this equipment contributes to increasing the percentage of locally sourced components in the energy sector, reducing reliance on foreign imports, and creating specialized technical job opportunities for Saudi nationals in advanced manufacturing fields.
