Dammam’s industrial cities are not, by any stretch of the imagination, facilities that will ever challenge Jubail or Yanbu as the heartland of Saudi Arabia’s heavy industry.
At Dammam, rather than a huge petrochemicals complex or oil refinery, you are more likely to find a small- or medium-sized manufacturing plant making products ranging from air conditioning ducts to Oreo cookies.
After decades of steady development, however, Dammam’s industrial areas are starting to play a vital role in state industrial diversification plans, while attracting the involvement of some of the world’s largest companies.
In 2011, the US’ General Electric (GE) opened a new $100m facility at Dammam that it promised would signal a shift in the way foreign companies invest in Saudi Arabia.
The GE Manufacturing Technology Centre (Gemtech) constructs gas turbine components for use in the power, water, and oil and gas sectors. Products from the plant are sold domestically and exported to international markets.
The Gemtech project has been embraced by the government in its push to promote industrial diversification. The world-class facility also includes a research and development arm that aims to develop technological innovations for the local market.
GE has earmarked $1bn-worth of investment in Saudi Arabia, making the kingdom one of its key international markets. In addition to Gemtech, the firm plans to expand its Saudi operations across several sectors, doubling its local workforce to 2,000 employees.
Following the start-up of the first phase of Gemtech, GE has decided to fast-track its second phase. On 1 October, the company invited dignitaries and journalists to the plant to witness the groundbreaking ceremony and to take a look at the progress the facility has made during its first year of operation.
Upon arrival at Gemtech, it is immediately apparent that GE’s Saudisation programme is gaining ground. The number of young Saudi graduates employed at Gemtech supports GE’s claim that nationals account for more than 50 per cent of the facility’s workforce.
“We have been in the kingdom for more than six decades and long-standing commitments are very important to us,” says Steve Bolze, president and chief executive officer (CEO) of GE’s power and water business. “In a country such as Saudi Arabia, you need [to embrace] localisation and this makes sense to [GE] too.
“[GE] has 500 gas turbines in operation in the kingdom, and if we can turn around the maintenance schedules faster by being local, this is great for us. And using Saudi technicians to do the work makes even more sense.”
Joining Bolze and GE’s chairman and CEO Jeffrey Immelt at the ceremony were representatives from Saudi Electricity Company (SEC) and Saudi Aramco. Both spoke of the importance of establishing world-class manufacturing facilities in the kingdom to create a local supply chain and welcomed the second-phase expansion.
When completed, the enlarged Gemtech plant will not only manufacture gas turbine components, but will also feature a service and repair centre and a training facility for students, field engineers and other power industry professionals.
MEED managed to speak to three Saudis enrolled in GE’s graduate trainee scheme and currently employed at the plant about why they chose to work for GE instead of government-owned companies such as Saudi Aramco, SEC or the Saudi Basic Industries Corporation (Sabic).
“When I was at university, many of my Saudi friends only wanted to work for Aramco or Sabic,” said one of the young engineers. “But GE is also one of the largest companies in the world and I thought it would offer me great training and a different perspective on working for a local company. I am really enjoying working here; they look after us.”
His colleagues all spoke equally positively about working for GE and none felt that they were missing out by not working for a state company. One said a cultural shift was occurring with more young Saudis seeking employment with global companies that would allow them to travel and gain experience before establishing themselves in the kingdom.
By supporting GE’s efforts at Gemtech, the message from Riyadh is clear: companies that invest in Saudi Arabia’s most precious natural resource, its people, are the companies the kingdom is going to do business with.