Saudi Arabia’s fragmented procurement strategy has cost local vendors SR350bn ($93.3bn) in lost orders and is jeopardising the kingdom’s downstream diversification programme, according to a local petrochemicals analyst.

Speaking at the Saudi Downstream 2014 conference held in Yanbu, former Saudi Basic Industries Corporation (Sabic) executive Abdullah al-Rabeeah said Riyadh needs to do more to enforce local procurement in order to drive downstream industries.

The official said enablers such as launching downstream investment companies increased localisation programmes, and developing capabilities in engineering, procurement and construction (EPC) contracting was essential for the next phase of Saudi Arabia’s industrial aspirations.

Al-Rabeeah also claimed that 65,000 jobs could be created just by developing six key sectors that rely heavily on imports. They are:

• Rubber
• Personal care
• Additives
• Paints and coating
• Engineering polymers
• Carbon composites

He also warned that traditional export markets such as China were developing their own domestic capabilities in intermediate chemicals, which could have a serious impact on the kingdom’s revenues if action was not taken to develop a strong domestic market.

“China is sucking everything in now, but that will not last when it develops its own capabilities in the products we sell,” he said. “The US shale gas revolution is doing the same, so we have to focus on creating our own market.”