Join

Enter Details

Comment on stories, receive email newsletters & alerts.

@
This is your permanent identity for Business Insider Australia
Your email must be valid for account activation
Minimum of 8 standard keyboard characters

Subscribe

Email newsletters but will contain a brief summary of our top stories and news alerts.

Forgotten Password

Enter Details


Back to log in

The boss of Saudi Arabia's $95 billion King Abdullah Economic City has 50 meetings in 4 days to rein in more investors

KAEC1KAEC

Saudi Arabia unveiled plans in 2005 to construct a gargantuan super-city in order to establish a thriving metropolis that could take on some of the world’s biggest industrial, manufacturing or tech centres in the world.

Now, more than a decade later, Fahd Al-Rasheed, Group CEO and Managing Director of King Abdullah Economic City (KAEC) revealed to Business Insider at the World Economic Forum how the $95 billion (£67 billion) super-city will match China for manufacturing and the West for tech innovation.

He has 50 meetings over the next four days with some of the world’s largest companies in order to secure more foreign direct investment.

“With KAEC, we are trying to create a new initiative to diversify our economy away from just oil. It’s entirely funded by the private sector and through foreign direct investment. It’s completely private,” said Al-Rasheed.

“The city has several major components that make it a metropolis — such as a major port, an industrial zone and a big residential area and all the amenities. The port for example has the capacity for 3 million containers.”

The KAEC was initially announced by the then King of Saudi Arabia — Abdullah bin Abdulaziz Al Saud — in 2005. The project is absolutely huge and is not expected to be completed until 2035. The city wiill eventually have 2 million residents will be spread across 70 square miles. This is the equivalent of the US capital city of Washington DC.

Al-Rasheed said that although he doesn’t have exact numbers for how many people are employed to construct the city, there are “easily 10,000.”

KaecCEOMcKinsey/YouTubeFahd Al-Rasheed, the Group CEO and Managing Director of King Abdullah Economic City (KAEC) spoke to Business Insider in Davos for the World Economic Forum meeting.

So far, the city has around 3000-5000 residents which is small compared to its capacity. However, after some initial teething problems, Al-Rasheed pointed out that KAEC is growing extremely rapidly and now dozens of some of the world’s largest companies such as automaker Volvo, pharmaceuticals Pfizer and Sanofi, are setting up shop there.

“Initially for five years, we had delays building the city because the credit crisis didn’t help. However we have grown around 30% every year for the past five years and really now we are ahead of schedule,” said Al-Rasheed.

“We have a population of around 5,000 people but that is set to hit 50,000 by 2020 — so the city has progressed quite nicely. The idea is to make KAEC into a global logistic and manufacturing hub and region. We want to compete with China for manufacturing and India for logistics.

“What we want to try and do is to get as many companies in to create jobs that will be filled by the best talent irrespective of nationality. Those jobs will convert into residents but they are also able to be resident and not work as well, for example renting.”

Al-Rasheed said that while all types of manufacturing, professional services, pharmaceuticals and tech companies are on KAEC’s wishlist, logistics companies are very attractive for the city right now.

But what was really interesting is what Al-Rasheed said next.

“We’re looking at making KAEC a major tourist destination. Yes — can you imagine that? A tourist destination in Saudi Arabia,” he said.

But he’s not talking about the super-city being the next Dubai — where many rich Westerners flock to for sun, pool time and cocktails in hotel bars.

“We have 10 million Saudis that go abroad to enjoy world destinations and the idea we have is to make KAEC a destination for religious tourists,” he said, referring to the country’s conservative Islam backdrop. We want to leverage the market we already have.”

NOW WATCH: Volkswagen’s brand chief gave an extended apology before their CES keynote

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.