Dr. Mosleh Al Otaibi
CEO of Jubail Industrial City and Ras Az-Zur
It is no coincidence that Dr. Mosleh Al Otaibi, CEO of Jubail Industrial City and Ras Az-Zur, has a professional background in education. He worked as director of Jubail Technical Institute – teaching the hands-on skills needed in the industry – and then as dean of Jubail Industrial College. “In this position, I realized that two main qualities needed to be encouraged in the students: knowledge of English and discipline. Both of these are even more important than the actual work skills. In a dangerous industrial environment, companies need communicative and responsible workers first and foremost”, explains Al Otaibi. He goes on to mention what he considers his main achievements as dean, namely setting up an extensive network of international cooperation programmes with institutes in various countries, and an 82% success rate in employing his students on graduation.
In 2010, Al Otaibi was appointed head of the Royal Commission of Jubail & Ras Az-Zur by HRH Prince Saud. 'My appointment was part of a reshuffle in the Royal Commission, and I got to work with a number of new, younger people who replaced the original commission members. Of course, my predecessor Jassim Al-Hajji helped and still helps me out a lot, but we essentially developed a new strategy with the new people, who are not living in 'the middle ages' any more. Building up a team, motivating people to work together, teaching them to be realistic in their goals and projects so they don't waste any effort, those are some of the achievements I am most proud of. Yet in a way we have achieved nothing yet. Come back in two or three years and you will see a different city. I am very optimistic about this project - I have the money, the people and the will. Moreover, Prince Saud is squarely behind me and pushing hard, so I am confident we will achieve our goals.”
The revamped Royal Commission under Al Otaibi's leadership now concentrates on developing Jubail II and the new structures at Ras Az-Zur, as well as expanding and improving the residential area of Jubail and its facilities. The project under construction at Ras Az-Zur marks the first serious attempt by KSA to exploit its non-oil mineral deposits. “We just signed a SAR 1 billion contract to build the road from Jubail to Ras Az-Zur, to refurbish and expand Jubail Industrial College and extend the railroad connecting Ras Az-Zur with the seaport to reach Jubail.”
The railway, like much of the industrial development, has been planned long ago – in 1975 – and is part of the strategic master plan to diversify the Saudi economy away from its dependence on oil production. Jubail I now has 25 primary operating facilities, two more under construction and another three in the design phase. Together, these 30 plants represent an investment of SAR 253.52 billion. Eight of the existing facilities have designated expansion areas.
Jubail I in fact counts another 40 Industries in the secondary and downstream sectors (representing SAR 15.37 billion) as well as a supporting and light industries counting 277 companies and representing an investment of SAR 4.24 billion. “But our emphasis is on the primary sector, which does not generate enough jobs yet,” says Al Otaibi, who goes on to explain the strategic vision of the Ministry of Petroleum that prefers to generate downstream industry, both to diversify the economy and to reduce the country's dependence on imported products based on the raw materials the country itself exports. “They are going very far in pushing companies to go into this field,” Al Otaibi explains, “even to the point of refusing to provide more gas to companies unless they also build downstream industries. This is currently a critical issue for the companies, but also for the Royal Commission – if we don't get appointed larger deliveries of gas, we cannot expand existing industries or install new ones. We often have to walk a tightrope to balance the policies of various ministries, who are not always integrated with each other. For example, we have gigantic building projects going on in Jubail Balad – the city itself – but often only two contractors can bid for them, because they are overloaded with work and cannot import more workers due to visa restrictions.”
The construction works Al Otaibi is alluding to are meant to solve a few pressing problems that prevent Jubail's growth. “The lack of affordable housing in Jubail is a problem, especially in light of the saudization of the workforce,” explains Al Otaibi. “The Royal Commission employs 3,525 people, 2,944 (83%) of them Saudis. We are currently constructing 700 housing units for them. I am confident that within a year we will have housed all our own personnel in the region. But the overall housing shortage including the contractors' workers is 19,000 units. Prince Saud has donated land for housing, on condition that employees will own their house and land. This is part of the government's ownership programme, and it will make Jubail a more sustainable project.”
Yet other facilities are lacking too for Jubail to be a full-fledged city: “We urgently need a mall, another hotel, and specifically more education and health care – we have no girls' school at the moment, and no kindergartens,” sighs Al Otaibi. “In the earlier phase, we were mostly making sure the needs of industry were met, but now we need to take care of the needs of workers and of the population of a city that grew around the industry. I have designated a medical area and an educational area for private companies to come and set up shop. The transport arteries are designed around those areas. At the moment I am overseeing SAR 9.65 billion for projects under construction, and I will get another 2 billion for the first two quarters of next year.”
As for the purely industrial aspects of the infrastructure, Al Otaibi confirms that the deep-water seaport is now ready and waiting to be opened, while the railway linking it to Ras Az-Zur will be operational by end 2010. Ras Az-Zur itself is still very much in the preparatory phase. “It's too early to say exactly what type of industry there will be. We are building the infrastructure right now, and in the first phase the minerals will just be exported or supplied to existing facilities that can use them. Before even drawing up the master plan for Ras Az-Zur, we are studying the front engineering, the environmental impact and other aspects.”
The environmental aspect is becoming a key issue in the kingdom. In Jubail, for example, the Royal Commission is continually monitoring - in various stations, some of them located inside plants - the quality and composition of the air, the seawater and the irrigation water. All these data are compiled and processed in a brand new, state-of-the-art laboratory. “We have spent SAR 700 million this year to improve our set-up. We have built a new monitoring station in Jubail Balad, the residential city 10 km from the industrial zone, where we measure ozone, CO2 and the like,” explains Al Otaibi who is proud of the environmental awards that Jubail Industrial City has received over the years and intends to keep receiving.
Jubail Industrial City is divided in four sections:
EXPANDING TO LEAD
The success of JIC in attracting foreign investment having exceeded all expectations, the government of Saudi Arabia decided to expand the industrial city and create Jubail II - only
three kilometers west of the existing city. The new development is projected to double the size of Jubail by adding 6,200 hectares. While JIC was the largest ongoing civil engineering project for the
past 30 years, JIC II, construction of which is currently in the last phases, has already exceeded its predecessor. Jubail II has been commissioned to Bechtel, known locally as Saudi Arabian Bechtel
Company (SABCO), a partner of the Royal Commission since the inception of Jubail I.
Jubail II will house up to 22 new primary industries including petrochemical industries, aluminium and other smelting plants plus areas to accommodate secondary and support industries and is expected to receive its natural gas feedstock from the Saudi Aramco Uthmaniyah project area. Currently one primary industrial facility is under construction and three more under design. Two secondary facilities are under construction and four more under design.
Together, these four primary industrial facilities – one of them a Dow Chemicals plant - represent an investment of SAR 130.43 billion, almost half the investment value of all 30
primary facilities at Jubail I. “The higher figure in investment money illustrates the larger budgets at our disposal now and the priority given to industrialisation by King Abdullah,” says Al
Otaibi. Out of this total investment, 87% comes from the private sector. The Royal Commission has only contributed some SAR 65 billion for infrastructure and services.
The site preparation for Jubail II includes an extension of the seawater cooling system and the desalinated water and electricity supply as, well as an up-to-date fibre optics communications infrastructure. The seaport will be expanded to meet the new demand, as will the highway and railway systems. Next to the industrial development, the Royal Commission plans to develop a new area of Jubail city to accommodate about 50,000 additional inhabitants. Jubail II is expected to generate some 55,000 jobs directly and an additional 330,000 indirectly.
The total cost of Jubail Industrial City II will be in the area of SAR 14 billion. This is expected to generate over SAR 200 billion in investment mainly from international sources. Construction of the city is currently in the third phase, which will end in 2018. The final phase will be accomplished in 2022. To give an idea of the monumental efforts, Bechtel states that “Jubail took project management to a grand scale. At peak, the workforce reached 50,000. Total installed cost exceeded $40 billion”.
THE FUTURE OF A LEADING EXPORTER
Saudi Arabia is today the largest producer and exporter of oil. It is a leading exporter of petrochemicals and soon will also be an important global player in minerals. The weak link has long been the infrastructure - more precisely an industrial transport system to connect Jubail with Yanbu and now Jubail with the new mineral city Ras Az-Zur on the Gulf coast. KSA has enough mineral deposits of phosphate and bauxite to catapult the kingdom to a place among the top exporting countries. It is estimated that phosphate exploitation and fertilizer production when optimized will produce 2.92 million tons per year of diammonium phosphate (DAP) fertilizer for export to high growth markets, in particular nearby Asian nations.
Ras Az-Zur, currently under construction, will be crucial to the success of the kingdom’s ambitious downstream oil and gas project: a SAR 13.1 billion fertilizer plant and a SAR 22.5
billion aluminum smelter, both to be run by Saudi Arabian Mining Co. (Maadin).
This acceleration of industrial development in Saudi Arabia brings along dramatic changes for both the nation and its inhabitants. “Any development takes a lot of change,” says his Royal Highness Prince Saud bin Tunnayan, “and the change needs to follow what is happening in the world and use the knowledge and education of qualified people. We need tools. We have a vision and there is a mission for that vision according to that we develop. King Abdullah has caused a lot of change in the kingdom to help us develop the country and we use our principles as tools to improve our system and regulations and eliminate obstacles to investment.”