This opportunity entails localizing the value chain of closed-die forging to serve KSA and GCC energy sectors.
Closed-die forging is one of five metal techniques (investment casting, sand casting, open-die forging and rolled-ring forging) used to manufacture energy products in KSA.
In KSA, closed-die forging is driven by turbines (Pelton, Turgo and Crossflow), vales (ball, check and gate), wellhead equipment (casing head and spools), gas compressors (positive displacement-reciprocating, rotary dynamic-centrifugal and axial), blowout preventers (ram and annular), flanges (carbon steels and stainless steel flanges) and gears (spur, helical, bevel, worm, Herringbone and rack & pinion).
In 2016, KSA demand for closed-die forging was valued at USD 179 Mn (17% of all five techniques used to manufacture energy products) and estimated to be 48 Ktpa (20% of all five techniques used to manufacture energy products) broken down by the following categories: flanges: 20.9 ktpa, ball valves: 6.0 ktpa, gate valves: 5.4 ktpa, turbines: 6.4 ktpa, wellhead equipment: 3.2 ktpa, gears: 2.7 ktpa, check valves: 1.6 ktpa, gas compressors: 0.8 ktpa, blowout preventers (ram): 0.7 ktpa and blowout preventers (annular): 0.4 ktpa.
Demand for closed-die forging in KSA is forecasted to increase at an annual growth rate of 3% to reach 63 Ktpa by 2025.
Beyond the KSA market, investors in Saudi Arabia have the opportunity to tap into the large regional market in the GCC which is expected to witness strong growth fueled by oil and gas production (expected to increase from 45 Ktpa in 2017 to 56 Ktpa by 2025).
The increase in demand for closed-die forging and the limited presence of local players coupled with the Governments push for localization presents a great opportunity for the private sector to invest in establishing state-of-the-art forging facilities (including next generation forging).
Beyond forging facilities for closed-die forging, other opportunities exist across the value chain including:
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