General Electric is investing at least $1.4 billion in a number of industrial ventures in Saudi Arabia as the kingdom tries to reduce its dependence on oil production.
The company said it was collaborating with Saudi Arabian Industrial Investments Co. and other entities to support Saudi Arabia’s economic and industrial diversification.
The centerpiece initiative is a $400 million forging and casting factory that will be the “first of its kind” in the Middle East and North Africa, creating 2,000 new local jobs when it opens in 2020.
“We are a committed partner in supporting the kingdom’s transformational and diversified growth, underscored by our 80 years of presence in Saudi Arabia,” GE Chief Executive Jeffrey Immelt said in a news release.
“Together, we will create quality jobs for Saudi youth, help build a robust [small-to-medium enterprise] chain, boost exports, enhance economic competitiveness, and support the vision and aspirations of Saudi Arabia,” he added.
As The Wall Street Journal reports, GE is making its investments “at a time when the Saudi government is trying to completely overhaul the country’s oil-dependent economy following the collapse in crude prices.”
Last month, the Saudi deputy crown prince Mohammed bin Salman announced Vision 2030, a plan to end what he called the kingdom’s “dangerous” addiction to oil. The country is struggling with youth unemployment of 29%, according to International Labor Organization data.
“As part of the new economic strategy, Saudi Arabia is trying to attract more international investors and their know-how to help create jobs for its growing population while also trying to boost sectors that don’t rely on the country’s oil wealth,” the WSJ noted.
GE is also working in Saudi Arabia to build a maintenance facility for military aviation engines, digitize 10 factories with state-of-the-art manufacturing software, and create an LED lighting factory by late 2016.
“GE’s confidence in Saudi Arabia stands in contrast with the doom and gloom offered by some big investors,” CNN Money said, noting that hedge fund manager Zach Schreiber recently warned of a looming financial disaster in the kingdom.