Site Selection Advisory for an Advanced Manufacturing Facility in Saudi Arabia's Industrial Sector

An industrial manufacturer planning to establish an advanced manufacturing facility in Saudi Arabia to serve domestic and regional demand and to localise production in line with the Kingdom's National Industrial Development and Logistics Program. With a capital investment exceeding SAR 900 million and significant long-term operating-cost implications tied to the location decision, the manufacturer engaged Saudi Strategy Advisory to identify and evaluate the optimal site for the facility.

• High-Stakes, Irreversible Decision: The site decision would lock in decades of logistics, utility, and labour costs and was effectively irreversible once construction commenced. The manufacturer required a rigorous, data-driven basis for the choice rather than a decision driven by incentives or familiarity alone.
• Complex Location Trade-Offs: Candidate locations across the Kingdom's industrial cities and economic zones offered different combinations of land cost, utility availability and price, logistics access, labour supply, and incentives, with no single location dominating on all criteria.
• Utility & Infrastructure Reliability: The facility required reliable, competitively priced power, water, and gas, and proximity to suitable logistics infrastructure. The manufacturer needed to verify actual availability and reliability rather than rely on headline assurances.
• Labour Availability & Saudization: Operations depended on access to technical labour and the ability to meet Saudization requirements. Labour supply and the local skills base varied significantly between candidate regions and had to be assessed objectively.
• Incentives & Regulatory Navigation: Different zones offered different investment incentives, customs treatment, and regulatory regimes. The manufacturer needed to quantify the real, net value of incentives and understand the licensing implications of each location.

Saudi Strategy Advisory was engaged to deliver Site Selection Advisory — providing the manufacturer with a structured, criteria-based evaluation of candidate locations, verified infrastructure and labour assessments, a total-cost-of-location model, and a clear, defensible site recommendation with a supporting implementation roadmap.

• Requirements & Criteria Definition: Worked with the manufacturer to define and weight the site-selection criteria, including logistics access, utility cost and reliability, land, labour supply, Saudization feasibility, incentives, and regulatory environment, creating an objective evaluation framework.
• Location Long-List & Screening: Compiled a long-list of candidate industrial cities and economic zones and screened them against the weighted criteria to produce a short-list of locations warranting detailed assessment.
• Detailed Site & Infrastructure Assessment: Conducted detailed assessment of short-listed locations, verifying utility availability, pricing and reliability, logistics connectivity, land terms, and labour-market conditions through primary engagement with zone authorities and utility providers.
• Total Cost of Location Modelling: Built a total-cost-of-location model quantifying capital and operating costs over the facility's lifecycle for each short-listed site, incorporating the net value of incentives, logistics costs, and utility tariffs to enable like-for-like comparison.
• Recommendation & Implementation Roadmap: Produced a clear, evidence-based site recommendation and an implementation roadmap covering land acquisition, licensing, incentive negotiation, and utility connection to support rapid execution of the location decision.

• Total-Cost-Optimal Location: Recommended the location that minimised total cost of location over the facility's lifecycle rather than the site with the lowest headline land price or largest upfront incentive, demonstrating that logistics and utility costs outweighed one-time incentives over time.
• Incentive Negotiation Strategy: Recommended a structured negotiation with the preferred zone authority to secure enhanced, contractually committed incentives and utility terms, using the comparative analysis as leverage to improve the offer materially.
• Phased Land Commitment: Recommended securing an option and phased land commitment aligned to the facility's expansion plan, controlling future growth land while limiting upfront capital outlay and holding cost.
• Labour & Saudization Plan: Recommended an early labour and Saudization plan including training partnerships in the chosen region, ensuring the technical workforce and compliance position would be in place when the facility commenced operations.

• Lifecycle Cost Savings: The total-cost-of-location analysis identified a preferred site projected to save approximately SAR 240 million in logistics and utility costs over the facility's first decade compared with the manufacturer's initially favoured location.
• Enhanced Incentive Package: The incentive negotiation strategy secured an improved, contractually committed incentive and utility package, increasing the net value of the location by an estimated SAR 55 million relative to the standard offer.
• De-Risked Infrastructure: Verified utility and logistics assessments eliminated the risk of post-commitment infrastructure shortfalls that could have disrupted production ramp-up and imposed significant remediation costs.
• Accelerated Execution: The implementation roadmap enabled the manufacturer to move from decision to land acquisition and licensing without delay, supporting an on-schedule construction start.
• Defensible Board Decision: The structured, evidence-based evaluation gave the manufacturer's board a fully defensible basis for a high-stakes, irreversible investment, replacing subjective judgement with rigorous analysis.