The Minister of Industry and Mineral Resources has launched about SAR 3 billion of MODON projects at Sudair, covering infrastructure, utilities and further ready-built factories. The authority signed more than 900 industrial contracts in 2025 and is targeting 16 million square metres of land and around 500 more ready-to-operate units this year.
The Minister of Industry and Mineral Resources has launched about SAR 3 billion of industrial projects at Sudair, covering roads and site infrastructure, water and electricity connections and a further tranche of ready-built factories. On the same visit he opened several completed plants in the city, among them a facility making medical nutrition products. Neither item is large by the standards of Saudi capital spending. Together they describe how the Kingdom now expects most of its new manufacturing to arrive.
The vehicle is MODON, the Saudi Authority for Industrial Cities and Technology Zones, which develops and operates the general-purpose industrial cities — as distinct from the Royal Commission for Jubail and Yanbu, which runs the heavy-industry cities at Jubail, Yanbu and Ras Al-Khair, and from the special economic zones created in 2023 at King Abdullah Economic City, Ras Al-Khair, Jazan and for cloud computing. MODON's portfolio runs to 39 industrial cities housing more than 7,000 factories, with investment contracts worth more than SAR 440 billion at the end of 2024.
The authority's own delivery figures are the more useful measure. It signed more than 900 industrial contracts during 2025, expanded its industrial land portfolio by over 19 million square metres and brought more than 400 ready-to-operate factories into service. For 2026 it is targeting a further 16 million square metres of land and around 500 more ready-to-operate units.
That last product is the one that has changed how quickly a licence becomes output. A ready-built factory is a completed shell on serviced land, leased rather than built: MODON has put up units of between roughly 700 and 1,500 square metres at Dammam Second Industrial City and at Al-Kharj aimed squarely at smaller manufacturers. For a company with a product and an order book but no capacity to carry two years of construction on its balance sheet, the difference between leasing a shell and developing a plot is the difference between producing next quarter and producing in 2028.
It matters because the national factory count is rising faster than the industrial base can be built plot by plot. The Ministry has been issuing new industrial licences at a rate of a few hundred a month, and the National Industrial Strategy sets a target of 36,000 factories by 2035. A licence, however, is a commitment to build. It becomes industrial capacity only when land, power, water, road access and a building exist in the same place at the same time — which is precisely what the SAR 3 billion at Sudair is buying.
The binding constraint in the industrial cities is rarely land. Saudi Arabia has a great deal of that. It is connections: firm power at the right voltage, water and treated effluent capacity, and access to a road or rail corridor that reaches a port. Enabling works of the kind announced at Sudair are unglamorous and are usually the reason a serviced plot is worth several times an unserviced one.
The industrial cities also now compete with each other, and with the special economic zones, on more than price. Sudair has been positioned around logistics and lighter manufacturing, Dammam and Jubail around the energy and metals supply chains, Jeddah around consumer goods and food, and King Salman Energy Park around oilfield services and electrical equipment. Where a manufacturer lands is increasingly decided by which anchor customer it is trying to sell to, not by which authority offers the cheaper square metre.
What none of this settles is utilisation. Contracted land and delivered shells are inputs; the output measure is occupied floorspace producing goods, and the share of ready-built units that are leased, running and re-leased when a tenant leaves. MODON publishes the first set of numbers routinely and the second set rarely. On the evidence of the 2025 contract flow and a 2026 target that assumes another 500 units find tenants, the authority expects demand to hold. The Sudair spending is a bet that the constraint stays on the supply side.