The past two years have seen a significant upswing in the value of industrial project contract awards in the Middle East and North Africa (Mena) region, driven by development schemes in a diverse range of materials processing and manufacturing, and with an emphasis on pushing into higher value sectors.

While in the past 10 years, the value of annual industrial project contract awards has averaged around $8bn a year, the regional awards figure surged to $13.5bn in 2023 and rose again in 2024 to $15.2bn by the end of October – placing the year on track to top the record $16.1bn awards figure in 2015.

At the time of writing, the value of projects in bid evaluation and prospectively due for award in the final two months of 2024 was $3.8bn – only a quarter of which would need to be awarded to make 2024 a new record year for industrial projects awards in the Mena region.

The lull in this sector until two years ago is a reflection of cyclical events, with the cash-rich oil-exporting countries coming down from an energy price high in 2015 and being further influenced in their industrial investment decision-making in 2020 by the impact of Covid-19.

However, as a key focus for both the predominantly non-oil economies in the region and a diversification target for the energy-rich economies, the industrial sector is an area of perennial investment that was always bound to bounce back when the conditions were right.

Top awards

Many of the highest value project awards in the past two years have been in either heavy industry, and especially metals processing and refining, or in assembly and manufacturing. In a sign of the newer technologies and industries being invested in, top project contract awards in the past two years include: a $2.4bn green steel plant being developed by India’s Vulcan Green at Duqm in Oman; a $1.4bn solar polysilicon plant being developed by United Solar Polysilicon in Sohar Oman; a $1.3bn Ceer-brand electric vehicle manufacturing plant being developed by the Public Investment Fund and Taiwan’s Hon Hai Precision Industry in King Abdullah Economic City, Saudi Arabia; and a $1.4bn battery factory project being developed by China’s Gotion High Tech in Kenitra, Morocco.

These examples reveal an emerging trend for regional investment into strategic and investor friendly sectors such as renewables, electrification and decarbonised industry. Such projects build upon a baseline of regional activity in mining and metals refinement, as well as local construction materials production, by diversifying away from more traditional industries and sectors towards the development of a higher tech manufacturing base with potentially higher returns.

Several similar projects are in bid evaluation and up for award before the end of 2024 or in design and expected to be tendered in 2025. These include the $3.2bn plans by the US-based Statevolt to develop a battery cell factory in the Al-Hamra Industrial Zone, Ras Al-Khaimah, UAE; a $2bn green steel plant planned by the UAE’s Taqa and Emirates Steel in Abu Dhabi; a $2bn project being developed by Morocco’s Al-Mada and China’s CNGR Advanced Material to build a factory for electric vehicle batteries in El-Jadida, Morocco; plans for another $450m lithium hydroxide plant for the battery production supply chain to be developed by Australia’s EV Metals Group in Yanbu, Saudi Arabia; and a $400m Al-Damani electric vehicle manufacturing plant planned to be built by the UAE’s M Glory Group in Dubai Industrial City.

Those projects alone represent over $8bn in combined value, or more than a third of the pipeline of projects due for award before the end of 2025, demonstrating the pace at which new investments are being made in more technologically advanced localised manufacturing capabilities and supply chain assets.

High-tech investment

With significant interest in the development of local data centres and artificial intelligence capabilities, the next wave of high-tech manufacturing investments in the region could well be into computer processor chips. In September, it was reported that both Taiwan TMSC and South Korea’s Samsung Electronics had expressed interest in building chip-manufacturing facilities in the UAE.

While the mainstay of regional industry remains heavy industry, recent project awards and the project pipeline provide a clear sense of the shifting focus of regional industrial investment efforts.