New York, June 15, 2021 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “Saudi Arabia Facility Management Market – Growth, Trends, Forecasts (2020 – 2025)” – https://www.reportlinker.com/p05999348/?utm_source=GNW
With the rising infrastructure development projects across the Kingdom of Saudi Arabia, contributing to its economic growth, facility management services are also required to a considerable extent.
– According to an industry insider analysis, in H1 2019, Saudi Arabia’s residential market prices appeared to have remained under significant pressure while transaction volumes surged significantly across critical regions, indicating that the residential market was heading toward the bottom of its cycle. With the rising urban population and a mismatch in the housing stock provision to low and middle-income group buyers, housing affordability in the country is a rising challenge.
– However, the Sakani scheme was initiated to tackle the affordability challenge and drives significant construction activity in the market. The Kingdom of Saudi Arabia’s Ministry of Housing planned that more than 32,285 families would benefit from the options provided by its ‘Sakani’ scheme in January 2020. The scheme was an effort taken by the government to expand the mortgage sector to ease the pressure on this area. Through these government initiatives, the rising affordability is anticipated to boost the construction sector, creating opportunities for the country’s FM market.
– According to the Middle East Facility Management Association (MEFMA), in 2020, the region expects to observe the use of more smart tools due to their numerous benefits. Presently, as per the latest statistics provided by the World Economic Forum, more than 70% of industrial enterprises are in ‘pilot purgatory’ when adopting Industry 4.0 technologies. Only 29% of players actively deploy Industry 4.0 technology at scale, and only 30% have yet to test this technology. MEFMA, the professional facility management (FM) platform, is confident that the use of cutting-edge technologies within the FM players will accelerate in 2020 and beyond.
– The COVID-19 pandemic has further sped up the adoption of cloud and emerging technology. Countries have dedicated significant resources to expanding the role of small and medium-sized enterprises (SMEs) in the economy. Furthermore, small businesses in Saudi were provided with a USD 13 billion financial aid to weather the crisis. These also indicate the country’s compliance with Vision 2030’s goal of increasing SMEs’ contribution to GDP to 35%.
– As a part of Saudi Arabia’s Vision 2030 strategy, the country aims to digitalize and develop AI. In August 2019, the Saudi Data and Artificial Intelligence Authority (SDAIA) was set up by a Royal Decree. The organization is intended to oversee the National Center for Artificial Intelligence, the National Data Management Office, and the National Information Center. As of August 2020, Saudi Arabia’s AI strategy was also approved by King Salman Bin Abdulaziz. The move is expected to contribute an estimated SAR 500 Billion (approximately USD 133 Billion) to the country’s GDP by 2030.
Key Market Trends
Construction Boom Due to the Growing Clout of Multinational Conglomerates is Expected to Grow the Market
– The Saudi Arabian construction industry benefits from private and public sector players’ increased focus on reforms, and it supports the country’s Vision 2030. Under this long-term vision, the government planned several economic, educational, and related reforms intending to innovate and diversify Saudi Arabia’s landscape.
– With continuing investment and technological enhancements, Saudi Arabia is investing in diverse projects. Saudi plans to invest approximately USD 1 trillion in its non-hydrocarbon sector by 2035. Some of the key projects include Qiddiya Entertainment City, King Abdullah Financial District, Neom, the Red Sea Project, and Amaala, to name a few.
– Multinational players are also expanding their footprint in the country, further boosting its construction sector up to a certain extent. For instance, recently, DuPont Water Solutions, a part of the DuPont Safety and Construction business, opened its new RO production line in Saudi Arabia. The facility is located in Jubail Industrial City II, and it will develop membrane technology at the Sadara Chemical Company complex, a joint venture formed by Saudi Aramco and Dow.
– Furthermore, in the past, Servcorp, a provider of workspace solutions, including virtual offices, serviced offices, and co-working spaces, planned to expand its presence in the Middle East as part of an aggressive growth plan for the EMEA region. The company was scheduled to open a range of premium locations across Saudi Arabia, Kuwait, Egypt, and Turkey.
– The increasing business opportunities in the country have also created possibilities for developing transportation projects. For example, the Riyadh Metro, a rapid transit system under construction in Riyadh, is a part of the Riyadh Public Transport Project, one of the major public transport projects.
Outsourced Facility Management is Expected to Grow Significantly
– As facility management accounts for a significant amount of a company’s expenses, outsourcing this to a third-party certified vendor has been a way to optimize these costs by end-users. Use cases also suggest an optimized cost on FM, owing to outsourcing, thereby, generating a positive impact on the company’s income.
– Outsourced FM services are delivered in the following ways: single, bundled, and integrated FM services. While single service contracts include the outsourcing of a single function (either hard or soft service spheres), bundled service contracts involve the outsourcing of multiple services falling within either of the hard or soft service spheres. On the other hand, integrated service contracts include outsourcing of services (at least two) from distinct service spheres.
– While manufacturing companies face tricky macroeconomic headwinds, many of the manufacturers have been making progress with smart factory initiatives in the region. In January 2019, the government of Saudi Arabia unveiled an infrastructure plan to attract SAR 1.6 trillion in investments. The core focus of the event was on the Industrial Development and Logistics program.
– The increasing construction activities in the region are anticipated to generate demand for facility management, such as HVAC equipment and plumbing and maintenance services. Construction businesses, particularly in the Middle East & Africa (MEA), are expected to develop at the rapid rate, which is expected to create a considerable influx of investments in infrastructure and building structures in Saudi Arabia.?
– Saudi Arabia has more than USD 1.15 trillion work of future projects in the pipeline, making it by far the largest market of all the GCC states.? The Saudi Arabia Vision 2030 aims at investing in mega-projects that will transform the economy. For instance, one the largest projects is the USD 500 billion Neom giga project, which involves the creation of a new city in the northwest of the country.
– Moreover, in Jan 2020, Saudi Arabia’s Ministry of Finance signed an agreement with the National Project Management, Operation, and Maintenance Organization in Public Entities (Mashroat), in order to improve its assets and facility management. Under the agreement, Mashroat will provide the ministry with consultancy services and technical support. Mashroat will also evaluate the ministry’s assets and train employees in international best practices, including computerized systems of facility management.
The Saudi Arabian FM market comprises both local and international players possessing significant years of industry experience. The FM companies are incorporating technologies into their services, which are adding strength to their service portfolio. For instance, Enova has introduced digital tools for its ‘Kinan’ project, which has positioned it as a significant player in the technology landscape. Moreover, recently, a significant number of joint ventures/acquisitions were made in the wake of rising large-scale projects. Therefore, the intensity of competitive rivalry is high.
– September 2020 – Khidmah Training Centre upskilled over 2,500 staff in the First Year of Operations. The training was conducted by the company’s dedicated Khidmah Training Centre, launched in September 2019. More than 15,000 training hours were delivered across multiple hard and soft facility management services. The Khidmah Training Centre is led by certified trainers who deliver training courses and certifications to Khidmah staff, including The British Institute of Cleaning Science certification (BICSc).
– March 2020 – Saudi Arabia’s Energy City Development Company (ECDC), the owner and developer of the 50km2 King Salman Energy Park (SPARK), sought after an agreement for ENGIE Cofely to offer facilities management advisory and training for SPARK. In addition to facilities management, ENGIE is also expected to establish the internal governance framework for the city and implement a training structure on facilities management for ECDC’s employees to ensure future continuity and progress.
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