National Industrial Strategy Progress: What the 36,000-factory 2035 Target Means for Manufacturers

Recent macro and sector signals underline why the factory target matters. In Q2 2025, non-oil activities grew by 4.7% year-on-year and contributed 2.7 percentage points to total GDP growth of 3.9%. Sources link this momentum to sectors including manufacturing, alongside tourism, retail, and financial services. The National Industrial Development and Logistics Program (NIDLP), launched in January 2019, is described as a principal vehicle for transformation across mining, manufacturing, energy, and logistics, operating with a budget envelope exceeding SAR 1.3 trillion (roughly USD 347 billion) across its delivery horizon. In this context, manufacturers are not just adding capacity; they are aligning to a multi-sector build-out that connects plants to ports, rail, and procurement demand.

What the 2035 Factory Target Changes on the Ground

The strategy is not only about counting factories; it is about where they are built and how they perform. Cluster development is already visible in food, mobility, and aerospace. The Jeddah Food Industry Cluster has attracted $5.3 billion in foreign investment and houses 75 factories across 11 million square meters. In Al-Kharj, a dairy cluster described as responsible for over 70% of national output generated $1.28 billion in exports in 2024. Aero Park One in Jeddah is cited as a 1.2 million square meter aerospace cluster focused on defense systems and space technologies. For manufacturers, these figures point to demand for localized suppliers, engineered utilities, and repeatable commissioning and ramp-up playbooks inside purpose-built zones.

Execution also depends on incentives and governance. MODON offers ready-built factories, shared warehouses, and streamlined licensing, while industrial zones benefit from proximity to ports such as King Abdullah Port and Jeddah Islamic Port, and rail networks including the North-South Railway and the upcoming Saudi Land Bridge. The NIDLP frames manufacturing as a pillar aiming to lift its GDP contribution from roughly 13% at programme launch toward 20% by 2030, supported by a sister national industrial strategy targeting 36,000 factories by 2035. Localization is reinforced through the Local Content and Government Procurement Authority and a mandatory list of national products covering roughly 1,500 categories. This combination means manufacturers must design supply chains and sourcing plans that can pass procurement scrutiny and scale within industrial-city ecosystems.

Near-term licensing activity shows ongoing momentum, but it also highlights operational constraints that can emerge when growth is fast. In May, Saudi Arabia issued 268 industrial licences tied to investments of SAR 2.23 billion, with licensed projects expected to generate more than 2,484 jobs; during the same month, 149 factories began production. A separate perspective warns that scaling without leadership depth can create volatility, describing risks such as rising scrap, normalized overtime, fluctuating delivery performance, and dashboards that look strong while shop-floor issues persist. The Saudi National Industrial Strategy therefore implies more than capex. It demands leadership pipelines, stable commissioning, and disciplined operating systems so new plants can reach predictable throughput as the industrial base expands.