Industrial Cities in Saudi Arabia and Investor Facilities by the Saudi Authority for Industrial Cities and Technology Zones (MODON)
Industrial cities play a pivotal role in the economic transformation and diversification of Saudi Arabia, serving as essential hubs for manufacturing, logistics, technology, and industrial investment. Under the leadership of the Saudi government and in alignment with Saudi Vision 2030, the development of industrial infrastructure has accelerated, positioning the Kingdom as a competitive global destination for investors and industrial enterprises. Central to this development is the Saudi Authority for Industrial Cities and Technology Zones (MODON) — the primary government entity responsible for planning, developing, managing, and promoting industrial cities across the nation.
MODON’s mission is to create an enabling industrial environment with modern infrastructure, supportive policies, and attractive incentives that facilitate business growth and sustainability. This article explores the landscape of industrial cities in Saudi Arabia, the strategy and impact of MODON, and the range of facilities and support offered to domestic and international investors.
The Strategic Importance of Industrial Cities
Industrial cities are planned zones equipped with infrastructure, services, and regulatory frameworks intended to support industrial production, manufacturing enterprises, logistics operations, and related sectors. These cities are a cornerstone of economic diversification efforts designed to reduce reliance on oil revenues, enhance export capabilities, create employment opportunities, and attract foreign direct investment.
Saudi Arabia’s industrial development strategy focuses on unlocking the potential of local industries, increasing the contribution of manufacturing to gross domestic product (GDP), and integrating technology and innovation into industrial production. By concentrating industrial activity within designated zones, the Kingdom can provide investors with optimized sites, streamlined processes, and shared utilities that significantly enhance operational efficiency.
MODON: The Driving Force Behind Industrial Cities
Background and Mandate
The Saudi Authority for Industrial Cities and Technology Zones (MODON) was established in 2001 as a statutory body under the Ministry of Industry and Mineral Resources. Its primary objective is to develop and manage a network of industrial cities throughout Saudi Arabia that serve as attractive destinations for domestic and foreign investment. Over the last two decades, MODON has successfully overseen the expansion of industrial infrastructure and has become a catalyst for industrial growth in the Kingdom.
Today, MODON oversees 39 industrial cities at various stages of development, each equipped with integrated infrastructure designed to meet international industrial standards. The cities collectively cover hundreds of millions of square meters of developed land and house thousands of factories in operation, expansion, or under construction.
Geographic Distribution of Industrial Cities
Saudi Arabia’s industrial cities are strategically distributed across the country, reflecting regional economic strengths and logistical advantages. These cities fall under different sectors that include:
-
Central Region – Hosting cities near Riyadh that serve central and northern markets.
-
Eastern Region – Supporting heavy industry and logistic connections with Gulf ports and energy sectors.
-
Western Region – Catering to industry and export-oriented facilities near the Red Sea coast and urban centers like Jeddah.
Each region offers distinct benefits in terms of proximity to infrastructure, access to labor markets, and supply chain connectivity, thereby enabling investors to choose the best location based on their operational needs.
Scope and Scale of Development
The scale of investment and industrial activity within MODON cities underscores the success of the strategy. As of recent data:
-
More than 6,000 industrial and logistics facilities have been established across MODON cities.
-
Hundreds of millions of square meters of industrial lands have been developed for industrial use.
-
Thousands of factories are operational, contributing significant value to national production and export.
-
Hundreds of billions of Saudi Riyals of total investment have been committed.
For instance, industrial cities have attracted investments valued at roughly SAR 370 billion and host over 4,000 factories, employing hundreds of thousands of workers. This demonstrates a robust ecosystem that supports large-scale industrial operations.
Comprehensive Infrastructure and Utilities
One of the primary incentives offered by MODON is access to fully integrated infrastructure that allows investors to start operations with minimal delays and maximum operational readiness. Some key features include:
-
Developed industrial land with ready utility connections.
-
Road networks designed for heavy transportation access within and outside the city.
-
Utility services including electricity, water, sewage, and telecommunications.
-
Environmental management systems that ensure compliance with national and international standards.
-
Security and public safety infrastructure to support stable operations.
This comprehensive infrastructure eliminates the initial burden on investors to develop basic utilities and provides a consistent, scalable environment for growth.
Investor Support Systems and One-Stop Services
MODON offers well-structured investor support systems that simplify regulatory procedures and reduce bureaucratic barriers. These support mechanisms include:
-
Land allocation through streamlined processes that can be initiated online, significantly reducing time — often to a few months.
-
One-stop-shop services that facilitate approvals, documentation, and coordination with relevant authorities.
-
Dedicated field departments in each industrial city to handle day-to-day investor needs.
-
Access to ready-built factories and industrial plots for immediate business setup.
This investor-friendly approach enhances Saudi Arabia’s appeal to foreign companies and multinational investors looking for efficient entry into Middle Eastern industrial markets.
Incentives and Competitive Advantages for Investors
MODON cities offer multiple incentives to attract investment, foster economic activity, and support long-term industrial sustainability. Key incentives include:
Affordable Land and Leasing
Investors benefit from competitive lease rates for industrial land, often significantly lower than regional market rates. This includes:
-
Long-term lease terms (typically up to 25 years, renewable).
-
Flexibility in lease size and location based on industry requirements.
-
Priority access to plots in high-demand cities.
These cost advantages make it easier for startups, SMEs, and large industrial players to establish operations at competitive capital requirements.
Ready-Built Factories and Facilities
To accelerate industrial deployment, MODON provides ready-built factories and facilities that are pre-constructed and available for lease or purchase. This significantly shortens the timeline between investment decision and operational launch, making them an attractive option for investors, especially SMEs and companies expanding operations.
Support for Residential and Social Infrastructure
Recognizing that industrial success is linked to workforce sustainability, MODON has initiated efforts to develop residential complexes, educational facilities, and worker housing within or near industrial cities. These services help support the social needs of workers and investors alike, thereby enhancing the quality of life and operational stability.
Sector-Specific Opportunities
Industrial cities also support sector-specific investment opportunities, such as logistics hubs, cold storage facilities, and commercial complexes that cater to industrial demand. These targeted opportunities help align investor interests with local needs and market gaps, encouraging the development of value-added sectors within industrial cities.
Regulatory Environment and Ease of Doing Business
In line with Saudi Arabia’s commitment to improving ease of doing business, MODON has collaborated with multiple government bodies to ensure a coherent regulatory framework that expedites investor processes, maintains transparency, and ensures predictable business outcomes.
Investors within industrial cities benefit from streamlined procedures related to:
-
Business licensing
-
Construction permits
-
Utility provisioning
-
Environmental compliance
-
Customs and export facilitation (especially for export-oriented enterprises)
The regulatory environment is designed to balance investor ease with national standards, ensuring industrial growth that is both sustainable and secure.
Human Capital and Employment Impact
Industrial cities have a significant impact on Saudi Arabia’s labor market. With hundreds of thousands of workers employed across thousands of facilities, industrial cities serve as major employment hubs that contribute to national workforce development. This aligns with national goals to increase local employment opportunities and cultivate a skilled workforce equipped for modern industries.
Contribution to Saudi Vision 2030
The development of industrial cities under MODON is central to Saudi Vision 2030, which seeks to diversify the Saudi economy, develop the private sector, and enhance global competitiveness. Industrial cities contribute to Vision 2030 by:
-
Expanding industrial output and exports
-
Reducing reliance on oil revenues
-
Encouraging foreign direct investment
-
Supporting SMEs and technology-based industries
-
Strengthening logistics and value chain capabilities
-
Promoting regional economic development
The strategic integration of industrial cities into the national development agenda underscores their importance as economic growth engines and investment magnets.
Future Outlook and Expansion Plans
Looking ahead, MODON continues to expand industrial capacity, develop new industrial zones, and enhance services and infrastructure to support future industrial growth. Ongoing development includes:
-
Expansion of existing industrial cities to accommodate new investors
-
Development of specialized industrial zones for technology and innovation sectors
-
Increased integration of logistics services and digital infrastructure
-
Ongoing collaboration with public and private sector partners to enhance service delivery and investment attractiveness
This ambitious expansion is expected to further elevate Saudi Arabia’s position as an industrial powerhouse in the Middle East and beyond.
Industrial cities in Saudi Arabia, developed and managed by MODON, represent a cornerstone of the Kingdom’s economic transformation. By providing world-class infrastructure, investor-friendly services, competitive incentives, and strategic support mechanisms, MODON has created a thriving industrial ecosystem that attracts local and international investors, supports diversification, and drives long-term sustainable development.
