Arabian Post Staff -Dubai
Minister of Industry and Mineral Resources Bandar Alkhorayef met senior Sistema executives during a visit to the Russian city, with discussions centred on cooperation in high-priority industrial sectors and the development of industrial cities in the Kingdom. The talks formed part of Riyadh’s effort to attract foreign expertise into manufacturing, technology transfer and industrial infrastructure, areas considered central to reducing reliance on imported inputs and expanding non-oil exports.
The meeting placed emphasis on localising advanced technologies, a policy priority that has gained importance as Saudi Arabia works to build domestic capacity in sectors linked to energy, mining, pharmaceuticals, food industries, automotive components, machinery, defence-related supply chains and high-value manufacturing. Industrial cities were also a key focus, reflecting the Kingdom’s strategy of using specialised zones to cluster investors, suppliers, logistics operators and research partners within integrated production ecosystems.
Sistema, a diversified investment group with holdings across technology, telecommunications, healthcare, agriculture, finance and consumer businesses, is being assessed as a potential partner in areas where Saudi Arabia is looking to accelerate industrial know-how and private-sector participation. For Riyadh, the value of such talks lies not only in attracting capital, but in securing access to operating models, technology platforms and industrial management experience that can be adapted to Saudi priorities.
The outreach comes as the Kingdom presses ahead with its National Industrial Strategy, which aims to expand manufacturing output, raise the contribution of industry to gross domestic product, strengthen export capacity and improve resilience in essential supply chains. The strategy identifies multiple priority sectors and investment opportunities intended to shift the economy towards higher-value production and reduce exposure to volatility in oil markets.
Saudi Arabia’s industrial policy is closely tied to Vision 2030, the reform programme led by Crown Prince Mohammed bin Salman. The programme has pushed the government to build non-oil sectors, expand private investment, increase local content and develop infrastructure that can support global manufacturers. Industrial localisation has become a central theme, particularly after global supply disruptions exposed the risks of overdependence on imported industrial inputs and critical technologies.
Industrial cities play a major role in that shift. The Kingdom has expanded dedicated zones managed through industrial and economic city frameworks, offering utilities, logistics links, licensing support and sector-specific infrastructure. These zones are intended to shorten project timelines and make it easier for foreign and domestic investors to establish production facilities. They also serve a wider policy objective: creating jobs, training local talent and building supplier networks around anchor industries.
Alkhorayef’s St Petersburg engagement also fits a pattern of industrial diplomacy by Saudi Arabia, with the ministry seeking partnerships across Asia, Europe and other markets to bring technology and manufacturing capability into the Kingdom. Riyadh has been courting investors in mining, metals, electric vehicles, aviation supply chains, medical technologies and food security, while also promoting its location as a production base connecting Gulf, Asian, African and European markets.
The Russia track carries both opportunities and sensitivities. Moscow retains strong industrial, engineering and technology capabilities, but Russian companies face a more complex international operating environment because of sanctions imposed by Western governments after the war in Ukraine. Any Saudi partnership involving Russian entities would therefore require careful structuring, compliance checks and commercial safeguards, particularly in sectors linked to technology, finance or cross-border payments.
For Saudi Arabia, the central calculation remains pragmatic. The Kingdom is trying to broaden its industrial partner base while avoiding excessive dependence on any single market. Engagements with Russian groups can complement ties with firms from China, Europe, Japan, South Korea and the United States, provided that projects align with Saudi regulations, localisation targets and long-term industrial needs.
The talks with Sistema did not immediately signal a binding agreement, but they point to Riyadh’s method of using high-level ministerial engagement to identify investable projects before moving to memorandums, feasibility studies or joint ventures. Such early-stage discussions usually cover technology suitability, land availability, incentives, financing, local content requirements and the ability of foreign partners to train Saudi workers.
Follow Arabian Post
Select Arabian Post as your preferred source on Google and MSN News for trusted business news and Arab politics and updates.
