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Local Content and Government Procurement Authority Signs Cooperation Agreement with Zamil Air Conditioners to Support Local Content in the Manufacturing Sector

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The Local Content and Governmental Procurement Authority has signed a cooperation agreement with Zamil Air Conditioners and Home Appliances Co. to develop and increase local content in the manufacturing sector in the Kingdom of Saudi Arabia, in order to reach the highest potential and enhance domestic spending in line with the strategic goals of the two parties.

The agreement was signed between the CEO of the Local Content and Governmental Procurement Authority, Mr. Abdulrahman bin Abdullah Al-Samari, and the CEO of Zamil Industrial Investment Co., Abdulla Mohammed Al Zamil.

According to the agreement, the authority will work on developing a comprehensive strategy and program for developing local content that includes proposed amendments to Zamil Air Conditioners’ procurement regulations and systems. The authority will also prepare a framework for improving manufacturers and suppliers that deal with the company, standardizing the methodologies and measuring mechanisms of local content, and defining the baseline of local content and its future objectives in the company.

In addition, Zamil Air Conditioners will define and identify investment opportunities to develop local content in the materials and goods produced by the company, as well as its services, which the authority can take advantage of to increase the percentage of local content in each of them. Additionally, the company will not only share previous procurement data and expected future needs for related materials and services with the authority, but also share the best practices and experiences of the two parties. These steps will enhance the local content, in addition to the studies related to raising its percentage, including the experiences that support localization opportunities and the transfer of technologies and skills.

On this occasion, Abdulrahman bin Abdullah Al-Samari stated that the signing of the agreement is a continuation of the authority’s efforts to develop local content in various sectors, including the manufacturing sector, which is considered a main pillar for the sustainability of economic growth. The manufacturing sector’s contribution to the Kingdom’s non-oil GDP reached about 7.5% in 2018, while the share of other manufacturing industries (other than oil refining) reached about 70% of the GDP of the industrial sector.

He added that these figures reflect the importance and dynamism of the manufacturing sector in the Kingdom, especially its contribution to diversifying the local industrial base. Moreover, they showcase the promising opportunities of this sector to enhance local content through the participation of Saudi elements in the workforce, goods, services, productive and technical assets, and the like, thereby enhancing domestic spending on these elements.

Abdulla Al Zamil indicated that this agreement is a continuation of the efforts undertaken by Zamil company at various levels to support the nation by enhancing local content and increasing the percentage of Saudization to achieve the objectives of the Kingdom’s 2030 vision. The agreement also comes within the framework of the authority’s initiative to increase the elements of local content in various industries, including the manufacturing sectors in the Kingdom, in a manner that leads to strengthening the role of the private sector in developing local content and contributing more effectively to achieving the development goals of the Kingdom’s Vision 2030, especially in terms of creating job opportunities and diversifying the national economy.

It is worth noting that this agreement is part of a series of cooperation agreements in various sectors, signed by the Local Content and Governmental Procurement Authority with several organizations from the public and private sectors in order to develop local content and increase its share in the contracts and purchases of government sectors.