LOCAL CONTENT DEVELOPMENT
SEC local development strategic plan includes three major initiatives to encourage and support local manufacturing as follows :
First Initiative :
Set policies and mechanisms to motivate the contractors :
Evaluate the accepted offers based on the following criteria :
- The bid price (85 points).
- Percentage of Saudization % (5 points).
- Percentage of using the local manufacturing part in the project (10 points).
The Premium formula as:
Total points = bid price pints + Saudization points + using the local manufacturing points
Set policies and mechanisms to motivate local factories :
stage : National products are given the priority over purchasing from foreign counterparts by 10%.
Second stage : A preference for the local manufacturers is based on the following criteria :
- Tender price.
- Local content for the plant.
- The importance of the product to the company.
To become an option, the equation is as follows :
Price differentiation = bid price (1- local preference ratio).
Percentage of local preference = local content ratio of the plant x percentage of the product’s
importance to the company.
Identifying localization opportunities for materials :
- Identify localization opportunities in materials and spare parts, and work with investors and international companies to draw attractions to establish local factories.
- Strengthen coordination and communication with government agencies, large companies in the Kingdom, and the shared committees between the Kingdom and other relevant authorities to localize the industry.
- Making strategic business partnerships with investors who wish to open factories for spare parts and materials that are not available locally.
- Transparency, with information and data on investment opportunities being readily available concerning the manufacturing of materials and spare parts. This is the biggest motivation for each investor who wishes to invest in the electrical services industry.