Rubber and Plastics Industry in Saudi Arabia

The Rubber and Plastics Industry in the Kingdom of Saudi Arabia is one of the manufacturing industries linked to oil in the Saudi Arabia, such as chemical industries, fertilizers, pesticides, and petroleum product refining. It is considered one of the high-demand industries in the markets. This industry grew alongside the increase in oil production in Saudi Arabia and its desire to benefit from this important natural resource.

Development of the rubber and plastics industry in Saudi Arabia

Investments in the rubber and plastics industry in Saudi Arabia increased to meet local and regional demand for its products. During the Eighth Development Plan, the number of rubber and plastics manufacturing facilities reached 412 factories in 2004, with financing amounting to approximately SAR11.291 billion. By the end of the plan in 2008, the number of factories had reached 444, with financing of about SAR11.532 billion.

Rubber and plastics product factories continued to grow and develop, and their number increased among the operating factories in Saudi Arabia. In 2012, the number of producing factories reached 757, representing 11.71 percent of the total number of factories, with a capital of SAR17.848 billion. This number rose to 797 factories in 2013, accounting for 11.87 percent of the total, with a capital of SAR24.324 billion.

Support for rubber and plastics factories in Saudi Arabia

The year 2014 witnessed a surge in the number of factories operating in this sector, with the number of licensed factories rising by the end of the third quarter. A total of 125 factories were licensed, contributing to an increase in the overall number of factories that year to 849, representing 12.04 percent of all factories in Saudi Arabia, with a capital of SAR27.455 billion. This number jumped to 945 factories in 2015, accounting for 13.14 percent of the total, with a capital of SAR25.015 billion.

With the continued support provided by the government of Saudi Arabia for the industrial sector and the development of infrastructure for various industries, the rubber and plastics products industry continued to grow, reaching 1,034 producing factories in 2016, with a capital of SAR28.618 billion. It accounted for 13.35 percent of the total number of factories in Saudi Arabia.

Industrial production in rubber and plastics products continued to flourish in Saudi Arabia over the years, with the number of factories also rising to 1,052 by the end of 2017. In 2018, rubber and plastics product factories accounted for 13.25 percent of the licensed factories.

This sector witnessed further growth as the private sector worked toward achieving the objectives of Saudi Vision 2030, with the number of producing rubber and plastics product factories reaching 1,087 by the end of the second quarter of 2021, with a capital of SAR31.079 billion. During the same period, the number of factories under construction reached 222, with a capital of SAR2.7 billion.

By the end of 2023, the number of operating factories in the rubber and plastics sector reached 1,383, representing 12 percent of the total number of operating factories in Saudi Arabia. These factories employ around 70,091 workers, representing 9.1 percent of the total industrial workforce. The total investment of these factories amounts to SAR78.418 billion, representing 5.1 percent of total investments.

Export of rubber and plastics products

The growth of the rubber and plastics products industry was reflected in its outputs, which found their way into both local and international markets. These products are exported to several countries around the world, adhering to the highest standards of quality and competitiveness. The value of Saudi Arabia’s exports of these products reached approximately SAR3.614 billion in 2015 and SAR3.541 billion in 2016.

Financing the rubber and plastics industry in Saudi Arabia

The rubber and plastics products industry has received support from national financing institutions to encourage investment and foster its development. In 2017, the cumulative number of funded rubber product projects by the Industrial Development Fund reached twenty-four, while the number of plastic product projects was twelve, bringing the total cumulative number of projects to 350. The cumulative value of industrial loans approved by the Industrial Development Fund for the rubber products sector reached SAR847 million, while loans for plastic products amounted to SAR220 million.

The Fund continued its financial support for investment in the rubber and plastics products sector in accordance with its financing terms and regulations. In 2019, it issued two loans totaling SAR3 million, bringing the cumulative number of loans to 29, with a total value of SAR871 million.

Investment in the rubber and plastics industry in Saudi Arabia

The investment scope of the rubber and plastics industry in Saudi Arabia expanded amid a rising wave of industrialization in the country over the past decade. As of October 2020, the total number of factories across all sectors reached approximately 9,563, with a capital investment of SAR1.086 trillion. These factories are distributed across all regions of Saudi Arabia and span more than twenty-four industrial activities. Among them, 1,253 factories were operating in the rubber and plastics products sector.

Industrial investment in the rubber and plastics products sector rose to rank among the leading industrial activities in Saudi Arabia by January 2021, with 1,276 factories producing rubber products. In comparison, the food products sector comprised 1,102 factories, and there were 1,168 factories producing fabricated metal products (excluding machinery and equipment). The number of factories producing other non-metallic mineral products reached 1,953. That period witnessed a 58 percent increase in the number of industrial licenses issued compared to December 2020, with 115 new industrial licenses granted. These were distributed among twenty-eight medium-sized enterprises and eighty-seven small enterprises, spanning various industrial activities. The food sector accounted for the largest share with twenty-seven new factories, while seventeen factories were licensed for the production of rubber and plastics products.

In May 2021, fifty-nine new industrial licenses were issued, with a capital of SAR532 million, while approximately thirty-three factories began production during the same period. Also, thirty-three factories began production in May 2021, with a capital of SAR1.229 billion. The rubber and plastics products manufacturing sector was among those that commenced production, with six factories beginning operations.

The report issued by the National Center for Industrial and Mining Information, affiliated with the Ministry of Industry and Mineral Resources, indicated that the total number of industrial licenses for April 2024 reached approximately eighty-six new licenses. The number of factories that began production during the same month was about sixty-seven, with a capital estimated at SAR1.508 billion, including ten factories for rubber and plastics products.