On 29 and 30 November, I was fortunate enough to attend the Jazan Investment Forum 2023, inaugurated by the Governor of the Jazan region, HRH Prince Mohammed Bin Nasser on behalf of Crown Prince and Prime Minister HRH Mohammed Bin Salman. Organized by the Jazan Chamber of Commerce, in cooperation with the region's municipality and Jazan Region Development Strategic Office, the event drew together an impressive list of key governmental and private agencies. HRH Prince Mohammed's opening speech underscored the forum's significant contribution to support Saudi Arabia's commitment to advancing Jazan's development, highlighting the recent qualitative shift in the type of projects being developed in the region.
The forum showcased a comprehensive strategy for Jazan's development, including the launch of the Special Economic Zone as an integrated economic growth center. HRH Prince Mohammed emphasized the pivotal role of Jazan's Port, underpinning as it does the support for local factories and projects. Noteworthy achievements such as the export of locally manufactured alloy steel to the United States and the imminent completion of King Abdullah International Airport by 2024 were highlighted. The event culminated in the signing of agreements and Memoranda of Understanding worth a reported SAR 32bn (c. US$8.5bn), symbolising the collaborative effort taking place to propel Jazan's economic landscape forward.
Here are the six key points I took away from my visit to the forum.
1. Expanding industrial footprint
Jazan is already a hub of industrial activity, being home to not one but two industrial cities: Jazan City for Primary and Downstream Industries (JCPDI), which falls within the remit of the Royal Commission for Jubail and Yanbu (RCJY), and Jazan Industrial City (JIC), which is overseen by the Saudi Authority for Industrial Cities and Technology Zones (MODON).
MODON is responsible for overseeing industrial cities in Saudi Arabia, and their integrated infrastructure. RCJY, on the other hand, is responsible for four specific industrial cities: Jubail and Yanbu Industrial Cities and Ras Al Khair City for Mining Industries, as well as JCPDI. Jazan is also home to Saudi Aramco's US$21bn, fully integrated Jazan Refinery and Petrochemical Complex.
2. New Special Economic Zone will spearhead new development
In April this year, four Special Economic Zones (SEZs) were launched in Saudi. Among these will be the new Jazan SEZ, which the forum heard will be located within JCPDI's footprint. RCJY is targeting four key sectors for the new Jazan SEZ: food industries, manufacturing, mining and metals, and logistics.
Investors into Jazan SEZ will benefit from a range of commercial incentives, including corporate tax rebates, customs duties deferrals, special rules for withholding taxes and VAT, and flexible regulations around the employment of non-Saudi nationals.
3. Increased assistance to investors in JIC
We heard about MODON's new, expanded role in supervising industrial zones, fostering private sector partnerships, and enhancing the regulatory environment, all of which positions JIC for industrial growth. MODON has now significantly streamlined its procedures, and investors in JIC will in many cases be able to obtain the necessary licences within days of application.
In addition, MODON has developed innovative incentives, such as ready-made factories developed to certain generic specifications, and a "land and loan" scheme (in partnership with the Saudi Industrial Development Fund, SIDF), whereby investors can access financing at the same time as gaining access to their allocated site.
4. Saudi Silk Road collaboration
Saudi Silk Road Company is a joint venture incorporated by Guangyin International Investment Development Limited (60%), RCJY (20%), and Saudi Aramco Development Company (20%). It was established under the support of the Chinese and Saudi governments, based on the strategic alignment between the Chinese Belt & Road Initiative and Saudi's Vision 2030.
Saudi Silk Road is responsible for promoting the development of JCPDI to Chinese investors. We heard of a number of Chinese-Saudi projects that are already under development, including in the petrochemicals, metals, industrial manufacturing and food processing sectors.
5. Infrastructure advancements
JCPDI Port, managed and operated by Hutchison Ports under a concession agreement with RCJY, is a deep-sea port with multipurpose terminals able to handle containerised, dry-bulk and general cargoes. In addition, we heard how the development of the new King Abdullah International Airport is, as noted above, expected to complete in 2024.
The integration of maritime, air, and land cargo routes can only underscore Jazan's commitment to cutting-edge infrastructure. The potential addition of a bonded customs zone will also allow investors to access a more beneficial customs regime, including reduced duties, better cashflow and improved procedures for import and export.
6. Targeting export markets
We heard how Jazan's geographical location at the mouth of the Red Sea, as well as its industrial sector management, opens avenues for Saudi industries to expand into Africa, presenting significant opportunities. The JCPDI Port is also the Kingdom's closest port to key export markets in East Asia.
As the Jazan region unfolds its vast economic potential, it strikes me that Norton Rose Fulbright stands at the forefront, well-placed to contribute to its development. With our extensive expertise in international projects, particularly in energy, infrastructure, and petrochemicals, as well as our on-the-ground presence in both Saudi Arabia and its key export markets including China, we are uniquely positioned to assist in navigating the legal complexities of Jazan's economic initiatives. The agreements and collaborations forged at the forum open new avenues for legal counsel, and we look forward to being an integral part of Jazan's transformative journey.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
