Manufacturing of mechanical seals for industrial equipment

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Overview

This opportunity entails developing the value chain for the production of mechanical seals for industrial equipment to serve KSA and the broader GCC region.

Overall demand for mechanical seals in Saudi Arabia has been growing, estimated to be 19,000 units in 2017. Driven by upcoming energy projects by Saudi Aramco, SEC and SWCC, demand is forecasted to increase at an annual growth rate of 6.1% to reach 30,300 units by 2025. Currently, KSA demand for mechanical seals for industrial equipment is addressed mainly domestically; however, the remaining 30% is addressed through imports, presenting a great opportunity for investors to localize production.

Beyond the KSA market, investors in Saudi have the opportunity to tap into the larger regional market in the GCC. With a growing demand in the region for high-quality mechanical seals used in oil and gas, water and wastewater, and power projects, the demand in the rest of the GCC is expected to increase from 29,000 units in 2017 to 45,000 units by 2025.

In addition to an increasing market demand, Saudi Arabia has competitive costs for materials, labor and logistics and offers funding and incentives to investors.

The main focus of this opportunity is to establish a manufacturing facility for mechanical seals for industrial equipment.

  • Manufacturing: establish mechanical seals manufacturing facility to fabricate seals components, the facility to include turning, boring, grooving, milling, drilling and tapping capabilities
  • Finishing operations: establish workshops to deliver hard facing, grinding, lapping, polishing and welding capabilities in addition to advanced surface treatment procedures

However, additional opportunities for localization exist across the value chain of mechanical seals production. These opportunities include:

  • Design: establish a design and engineering capabilities
  • Input materials: establish local foundries
  • Installation and maintenance: offer support services, including quality control, assembly, and installation services
  • Installation and maintenance: offer maintenance services and repair services for mechanical seals and installed base

Opportunity Details

Industrial and Manufacturing
Sector
Industrial Equipment & Spare Parts
Sub-sector
To be determined by the investor
Location
To be assessed by investor (cost drivers and other financial figures to be shared upon request)
Investment size
Open to starting the project as soon as possible
Timeline

Investment Model

Model: Opportunity to consider different operating models:
  • Pure private sector model
  • Joint venture with local player

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