Companies from Saudi Arabia and Japan are in talks to set up a joint venture to set up a manufacturing hub for automotive parts in the Gulf kingdom.
Saudi-based Abdul Latif Jameel and Japanese company Kosei Aluminium (Kosei) have signed a memorandum of understanding (MoU) with the National Industrial Clusters Development Program (NICDP), driving foreign investment into Saudi Arabia’s auto manufacturing sector.
The deal seeks to explore the first major Saudi-based automotive components manufacturing venture intended to produce exports for worldwide markets.
Long term plans for the venture involve the establishment of a factory in Saudi Arabia, as a global hub for Kosei, a statement said.
The volume of wheels produced would represent a significant market share in the world with the factory employing a "significant" number of people, the statement added.
This would contribute to the development of the manufacturing industry in the country – a key priority of Saudi Vision 2030.
The MOU, signed by NICDP Vice President, Abdullah AlHazani, on behalf of NICDP President, Eng. Homood Al-Tuwaijiri, Kosei CEO & President Shunkichi Kamiya, and Abdul Latif Jameel Vice Chairman and Deputy President Hassan Jameel will see Abdul Latif Jameel, Kosei and NICDP undertake a study into the technical and financial feasibility of manufacturing automotive aluminum die casting wheels and components in Saudi Arabia.
Kosei CEO and president, Shunkichi Kamiya, said: “It is our pleasure to sign this MoU with NICDP and Abdul Latif Jameel, to discover the enormous potential and various opportunities in Saudi Arabia as well as the MENA region.
"With all the materialistic advantages possessed by Saudi Arabia and technological contribution coming from Japan, we hope to succeed in our ventures in upbringing of the kingdom’s community to a large extent."
Hassan Jameel, Abdul Latif Jameel vice chairman and deputy president, said: “This MoU explores the exciting potential to bring manufacturing skills and jobs to Saudi Arabia and marks the first Saudi Arabian venture in largescale automotive components manufacturing for export.
"The agreement is an important step in NICDP’s efforts to develop the manufacturing industry in Saudi Arabia in accordance with Saudi Vision 2030, and strives to make a valuable contribution to the Saudi automotive cluster.”
The signing comes ahead of the expected visit to Saudi Arabia by Japanese Prime Minister, Shinzo¯ Abe, and follows a visit by King Salman bin Abdulaziz Al Saud in March 2017, during which Saudi Arabia and Japan agreed to deepen existing bilateral relations, as part of the Saudi-Japan Vision 2030.