MODON Signs SAR270 Million Deal for First Nestlé Food Factory in Jeddah

The Saudi Authority for Industrial Cities and Technology Zones (MODON) has signed a contract with Nestlé to allocate a 117,000-square-meter industrial plot in Jeddah Third Industrial City. The agreement, signed under the patronage of Minister of Industry and Mineral Resources and MODON Chairman Bandar bin Ibrahim Al-Khorayef, marks the establishment of the first food factory in the Kingdom, with an initial investment of SAR270 million. The facility is scheduled to open in 2025, aiming to boost local production and enhance food security.

Context and Background

This contract aligns with Saudi Arabia’s National Industrial Strategy, which prioritizes the development of the food industries sector. MODON’s food cluster initiative in Jeddah’s second and third industrial cities is designed to strengthen supply chains and promote exports by providing an integrated and supportive environment for food manufacturing. The Jeddah Third Industrial City has emerged as a key hub for industrial growth, attracting international companies like Nestlé to invest in advanced production capabilities.

Key Details

The signing ceremony was attended by MODON CEO Eng. Majed Al-Argoubi and Nestlé CEO Robert Helou. In its initial phase, the project will focus on producing baby food and launching an automated production line equipped with the latest packaging technologies. The factory will be operated by qualified national food industry personnel and is expected to create hundreds of direct and indirect jobs. Initial annual production capacity is set at 15,000 tons, with plans for expansion.

Implications and Impact

This investment underscores the growing confidence of global food companies in Saudi Arabia’s industrial ecosystem. By localizing production, the project reduces reliance on imports, strengthens food supply chains, and supports regional economic development. The factory’s advanced automation and focus on baby food cater to domestic demand while positioning Saudi Arabia as a competitive manufacturing destination in the Middle East.

Vision 2030 Alignment

The establishment of this food factory directly supports Vision 2030 goals of economic diversification, industrial development, and food security. By attracting foreign direct investment and creating skilled jobs for Saudi nationals, the project contributes to the Kingdom’s transformation into a global industrial powerhouse, fostering sustainable growth and innovation within the food sector.

20 Questions

Q1. Who signed the contract for the new food factory in Jeddah?

A1. The Saudi Authority for Industrial Cities and Technology Zones (MODON) signed the contract with Nestlé to allocate an industrial plot in Jeddah Third Industrial City.

Q2. What is the total investment volume for the new food factory?

A2. The initial investment for the food factory is SAR270 million, as announced by MODON during the signing ceremony.

Q3. Where will the food factory be located?

A3. The factory will be built on a 117,000-square-meter industrial plot in Jeddah Third Industrial City, Saudi Arabia.

Q4. When is the factory expected to open?

A4. The factory is scheduled to open in 2025, according to the contract signed between MODON and Nestlé.

Q5. Which Saudi minister attended the signing ceremony?

A5. Minister of Industry and Mineral Resources Bandar bin Ibrahim Al-Khorayef, who is also Chairman of MODON, attended the signing ceremony.

Q6. Who represented MODON at the signing ceremony?

A6. MODON CEO Eng. Majed Al-Argoubi represented the authority during the signing ceremony in Jeddah.

Q7. Who represented Nestlé at the signing event?

A7. Nestlé CEO Robert Helou represented the company at the signing ceremony for the new food factory.

Q8. What type of food will the factory produce initially?

A8. The initial phase will focus on producing baby food, using an automated production line with advanced packaging technologies.

Q9. What is the annual production capacity of the new factory?

A9. The factory will have an initial annual production capacity of 15,000 tons during its first phase of operations.

Q10. How many jobs is the factory expected to create?

A10. The project is expected to create hundreds of direct and indirect jobs during its first phase in Saudi Arabia.

Q11. What technology will the factory use?

A11. The factory will feature an automated production line equipped with the latest packaging technologies for efficient manufacturing.

Q12. Who will operate the factory’s production line?

A12. The automated production line will be operated by qualified national food industry personnel from Saudi Arabia.

Q13. What is the food cluster initiative in Jeddah?

A13. MODON’s food cluster initiative aims to enhance supply chains and promote food exports by providing an integrated industrial environment in Jeddah’s second and third industrial cities.

Q14. How does this project support the National Industrial Strategy?

A14. The project boosts the food industries sector, in line with the National Industrial Strategy’s goals of local production and supply chain strengthening.

Q15. What is MODON’s role in Saudi industrial development?

A15. MODON oversees industrial cities and technology zones, facilitating investments and infrastructure to support manufacturing and economic growth.

Q16. Why is Jeddah a strategic location for this factory?

A16. Jeddah’s industrial cities offer strong logistics and access to domestic and export markets, making it an ideal hub for food manufacturing investments.

Q17. What are the benefits of localizing food production in Saudi Arabia?

A17. Localizing production reduces import dependency, enhances food security, creates jobs, and strengthens the national economy through value-added manufacturing.

Q18. How does this investment align with Vision 2030?

A18. The factory supports Vision 2030 by diversifying the economy, attracting foreign investment, and developing skilled Saudi talent in industrial sectors.

Q19. What is the significance of Nestlé’s investment in Saudi Arabia?

A19. Nestlé’s investment reflects global confidence in Saudi Arabia’s industrial ecosystem and commitment to long-term manufacturing partnerships in the region.

Q20. What future expansions are planned for the factory?

A20. The initial phase focuses on baby food production, with potential for future expansion to meet growing demand and further support local supply chains.

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