In a landscape shaped by Saudi Arabia’s Vision 2030, Salem Balharith, CEO of Armi Company, stands as a distinguished auto engineer, blending expertise from Toyota and government agencies to carve a path of innovation. With an eye on sustainable progress, he spotlights an untapped opportunity in the Kingdom’s auto industry: the transformative potential of sustainable auto recycling. This visionary pursuit aims not just for profitability but also aligns profoundly with Saudi Arabia’s commitment to economic diversification and environmental stewardship.
Saudi Market and the Vision 2030
Saudi Arabia’s Vision 2030 is a bold and ambitious plan to transform the country into a more diversified and sustainable economy. It is built around three pillars: a vibrant society, a thriving economy, and an ambitious nation.
Vision 2030 is an ambitious plan to diversify the Saudi Arabian economy and reduce its dependence on oil. The plan focuses on developing a number of new sectors, including manufacturing, mining, and logistics.
The Saudi Arabian government is committed to supporting the growth of industrial businesses. It has introduced a number of reforms to make the business environment more attractive to investors, including reducing bureaucracy, streamlining regulations, and offering tax incentives.
There are a number of specific reasons why I believe Saudi Arabia is a great place to invest in industrial businesses.
- First, the country has a large and growing population. Saudi Arabia has over 35 million people, and its population is expected to grow to over 50 million by 2030. This provides a large and growing market for industrial products.
- Second, Saudi Arabia has a strategic location. It is situated at the crossroads of Europe, Asia, and Africa, making it an ideal hub for manufacturing and logistics.
- Third, Saudi Arabia has a number of natural resources that can be used to develop industrial businesses. For example, the country has abundant reserves of oil, gas, and minerals.
- Finally, the Saudi Arabian government is committed to supporting the growth of industrial businesses. It has introduced a number of reforms to make the business environment more attractive to investors.
I believe that the Saudi Arabian Vision 2030 presents a number of exciting opportunities for investors in industrial businesses.
Automotive Project
As Saudi Arabia’s automotive sales continue to accelerate, with over 600,000 new car sales in 2022, the Kingdom must put more focus on sustainable auto recycling. Currently, Saudi scraps over 250,000 end-of-life vehicles annually yet recycles just a fraction of this potential auto waste. Immediate efforts are required to capture the environmental and economic opportunities from auto recycling.
The vast majority of old vehicles in Saudi are abandoned or left to be scrapped informally. However, leaving auto recycling to an unregulated market carries risks. Toxic fluids, batteries and parts get discarded irresponsibly, polluting the landscape. Valuable metals, plastics, and rubber get wasted instead of reused. An estimated $400-500 million in raw materials gets lost annually. The industry is expected to grow at a compound annual growth rate (CAGR) of around 5% in the coming years, driven by a number of factors, including:
- Increasing demand for recycled metals from the automotive and construction industries
- Government initiatives to promote waste management and recycling activities
- Rising disposable income and changing consumer preferences
Saudi Arabia has the chance to follow Europe’s lead, where end-of-life vehicles are captured in regulated recycling programs. With proper auto recycling facilities and government incentives, Saudi can tap into a new revenue source while conserving resources and reducing environmental impact. Recycled auto materials can support domestic manufacturing and parts production as well.
Achieving a robust auto recycling ecosystem requires a coordinated strategy. Legislating manufacturer responsibility can ensure vehicles are recycled appropriately. Subsidies and tax breaks can spur private sector recycling centers. Awareness campaigns can promote public participation.
Saudi Arabia’s fast-growing auto market provides an opportunity to plan sustainable auto recycling from the outset. Capturing this value aligns with Saudi’s Vision 2030 goals. Just as Saudi establishes itself as an auto manufacturing hub, so too can it parallel that with environmentally sound auto recycling.
Expected Profit
According to the feasibility study, the expected annual profit in the first year is 80 million SAR, with a gradual increase of 13.5% each year.
Investment Opportunity
I believe that the auto recycling and scrap industry is the right sector for investors in industrial businesses to invest in. This project complies with Saudi Vision 2030 and is within the interest radar of the Saudi government.
About the author
Salem Balharith is a renowned auto engineer with extensive experience in the Saudi industry, working with both the private sector and government agencies. He began his career at Toyota, a pioneering brand in the Saudi automotive industry, and his skills later led him to join government agencies to systemize processes and help them grow. With his leadership and entrepreneurial spirit, he founded and established his own business, which now encompasses three companies serving various industries.
If you would like to find out more, please contact Salem at salem.balharith@gmail.com
