Saudi Arabia’s drive for self-sufficiency

What is your strategy for developing Saja’s own technological solutions?
Our focus at Saja Energy is aligned with Saudi Arabia’s Vision 2030, which involves developing local manufacturing capabilities. We see great value in moving forward with the country’s vision, especially when it comes to manufacturing high-tech solutions. We are focusing on manufacturing upstream completion products and smart lighting systems. We have a reasonably aggressive capex plan for manufacturing. We have invested in our warehouse, in robotics and now in developing our engineering capabilities. We are putting in place a novel concept in the Saudi market, which is for the company to develop and own its intellectual property.
We are developing our engineers’ capabilities through co-operation with universities, as well as hiring expats whose sole job is to mentor and develop our training capacity. The plan is to offset some of the local skill shortages by fast-tracking the development of our engineering skillset, which is an innovative idea.

What are the challenges in developing a self-sufficient manufacturing sector?
Saudi Arabia doesn’t have many R&D capabilities, except for those of King Fahd University of Petroleum and Minerals and Saudi Aramco. Saja is leveraging this by developing our own R&D.
For too long, Saudi Arabia has used the equipment and processes supplied by international service companies. However, as it represents 10% of the world’s oil production, the country can and should have a bigger influence on the development of innovative techniques, tools and skills to take the energy industry to a new level.
We see challenges with the supply chain relying on imports for critical raw materials, which hampers the competitiveness and development of the manufacturing sector. Hopefully, in the future, the country will achieve self-sufficiency in raw materials, closing the gap in the supply chain. The steel industry is an excellent example of success in this area.

How can Saudi Arabia add more value to its manufacturing value chain?
There has been a massive change since the country came out with the latest localisation programme. Saudi Arabia realised that if a product is designed, manufactured, used domestically and exported elsewhere, there’s far more value to the country than if items are simply manufactured but not developed. Just manufacturing is what China and Japan were doing 50 years ago. Over time, first Japan and now China have been moving into product, IP and know-how development. We want to shorten the gap between manufacturing and this phase to the smallest possible timeframe.
Saudi Arabia wants to make the leap and go into design, qualification, control and manufacturing, the whole process, including the development of intellectual property law. Saudi Aramco wants to push it, but they won’t push it at any cost. The more you can localise intellectual property, meaning development and manufacturing, the bigger the benefit is.

How do you plan to enhance your own local supply chain?
We’ll localise as much manufacturing as possible, either by ourselves or with our partners. This is indeed our objective, but we are well aware that a single company will never be able to manufacture every element of a product, be it completion equipment or smart lighting systems.
So, we’re actively looking at the local supply chain and strategising on how to develop it and help educate local manufacturers on upgrading their systems and machinery.

How is Saja capitalising on the business opportunities around the development of renewable energies and smart cities?
Saudi Arabia presents a real possibility to develop innovative concepts such as smart cities or solar-powered streetlight systems that cannot be developed in most European countries due to infrastructure or space constraints. Renewables are a big market here. Our plan is to work on small-scale solar system installations, in addition to focusing on smart city solutions. One of the key drivers is future-proofing what you do. We believe that traffic management, pollution control, safety and energy saving are obvious areas where Saja’s technology can deliver value.
The data collected can be used for a whole host of perhaps considered peripheral benefits, for example, influencing planning, development and expansion. What to build and where to build based on data, habits and more can lead to better decision-making. A simple idea could be multi-storey car parking lighting requirements that are managed over time based on actual occupancy. We want to become a supplier to the value chain of photovoltaic plants.
We’re interested in smaller projects that are not so interesting for bigger corporations. We’ve no ambitions to have solar farms in the middle of the Arabian Desert. We have the capability to manufacture between 150,000 and 200,000 LED lights per year. The demand in Saudi Arabia is 500,000 LED lights per year. In the short term, we don’t expect to run at full capacity, but our robotic manufacturing system can turn its hand to other cast products.
Whilst we can cast aluminium and other feedstock to make LED lights with the same robotic solutions, we can cast zinc, for example, for upstream completion accessories.

What is your latest news on the export front?
We have formalised an agreement to supply a UK-based company with zinc-based centralisers. We have some huge competitive advantages over other global suppliers right now. The current energy crisis in Europe is driving up the cost of most energy-intensive industries, giving room for our products to compete in price terms. This is another reason why we are heavily investing in our robotic tools to grow our manufacturing capabilities. We may have some productivity and skills gaps which can inflate our costs, but other advantages weigh in to keep us competitive. Now is the time to close those productivity and skills gaps for future sustainability.

How would you describe Saudi Arabia’s attractiveness as an investment destination?
Over the last five years, the government introduced new legislation and new business concepts to attract investors. Saudi Arabia is one of the fastest-growing markets in the world. Without a doubt, it’s a focal point for major projects in the Middle East at this moment. This is the perfect time for all types of investors to come and invest in the Saudi market. The growth plan for this country is massive, and it is only just beginning.

What do the next 12 months look like for Saja?
From our factory, we will be supplying lighting across a broad spectrum of applications, from street to stadium and facility lighting. Off-grid solar power stations and their management are hugely attractive to us. We complement this with building management skillsets and security. Upstream, we are looking at sand face completion designs, which are prominent in Saudi Arabia and neighbouring GCC countries. Our aim is to provide some new technologies and accessories that are complementary to what is currently used. Along the journey an IP will be filed, cementing the company’s vision as a technology owner.