Abdul Latif Jameel and Japan’s Kosei Aluminum Co. have signed a memorandum of understanding (MoU) with the National Industrial Clusters Development Program (NICDP) to explore manufacturing of automotive aluminum wheels and components in Saudi Arabia, the Saudi company said in a statement.
The plant will be the first major Saudi-based automotive components manufacturing venture, intended to export products to global markets.
Long term plans for the venture involve the establishment of a factory in Saudi Arabia, as a global hub for Kosei, contributed by Saudi Arabian Mining Company (Maaden).
The volume of wheels produced would represent a “significant world market share, with the manufacturing plant investment expected to generate significant employment opportunities,” the statement said, without providing exact details on expected market share and number of jobs to be created.
The signing comes ahead of Japanese Prime Minister Shinzō Abe’s expected visit to Saudi Arabia.
It also follows a visit to Japan by Saudi ruler King Salman in March 2017, during which the two countries agreed to deepen existing bilateral ties.
Saudi Arabia aims to develop its local manufacturing sector as part of plans to diversify the economy and reduce reliance on oil.
On Sunday, the government announced plans to develop a car-manufacturing city and encourage investment in the industry.
The raw materials required including aluminum, rubber, and plastics will be offered at competitive prices, the energy ministry said on Twitter.
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