National Industrial Development and Logistics Program and Impact Creation

Friday, 10 July 2026 13:24 | 2 minutes read

Factories alone do not build an industrial economy, just as expanding ports alone does not necessarily mean increasing exports. The real difference appears when an integrated ecosystem forms around these assets, comprising local suppliers, engineering expertise, specialized services, and logistics capabilities capable of delivering products to markets.

This idea is the foundation of the National Industrial Development and Logistics Program. The program does not view energy, mining, industry, and logistics as separate sectors, but as an integrated system. It connects natural resources to manufacturing, supports factories with services and supply chains, and then enhances product access to local and global markets through a more efficient logistics system.

The results of the National Industrial Development and Logistics Program for 2025 indicate the expansion of this base. The contribution of the program's sector activities to non-oil GDP reached about 1.045 trillion riyals, representing 39% of total non-oil GDP. Non-oil exports amounted to 622.87 billion riyals, growing 14% compared to 2024.

These are important numbers, but their value is measured not only by the scale of expansion, but by the economic activity they generate. The impact of factories is not limited to what they produce within their walls; it extends to the demand they create for local suppliers, services, and skills. And the value of ports is only realized when they help these products reach markets.

The military industries provide a clear example of this transformation. The localization rate of military spending reached 24.89% by the end of 2024, highlighting the increased share of local companies and capabilities in this spending. The next step is to turn this spending into local industrial capability by developing the components and engineering services needed by the sector.

This is also evident in the pharmaceutical sector. The inauguration of the MS Pharma biologics plant in the Third Industrial City in Riyadh is not only about local drug production; it opens the door to an industry requiring laboratories, technical expertise, and precise quality standards. The value of the plant lies not only in what it produces, but in the laboratory services, research and development, specialized competencies, and companies that can emerge around it to support the healthcare sector.

This idea is not limited to military or pharmaceutical industries. In mining and energy, the opportunity lies not only in discovering resources or increasing production, but in the industries, treatments, and products that can be built around them, retaining a larger share of their value within the economy.

What has been built over the past years represents an important foundation for the National Industrial Development and Logistics Program. The next phase concerns what this foundation will produce: stronger local companies, deeper technical expertise, and exports with higher added value. Value lies not in the factory or port itself, but in the economic activity that forms around it and continues beyond it.

Writer and analyst in financial and business affairs