[KH explains] Why Korea has been so quick to adopt ‘global minimum tax’
Mass walkout by trainee doctors nears deadline as health services crippled
Teachers and native English instructors now required to undergo drug testing
[Today’s K-pop] Karina of aespa is dating actor Lee Jae-wook: report
Russia sending North Korea food in return for arms: Seoul defense chief
Yoon says 2,000 increase in med school quota non-negotiable
Legality issues linger as nurses fill treatment void Tuesday
Why Cha Eun-woo’s name keeps popping up in politics
University ranking hierarchy leads to wage gap later in life: study
Ultrafine dust levels this year could be severe: ministry
Hyundai Motor to build 1st car plant in Saudi Arabia, leading 46 Korea-Saudi deals
$500m deal comes as part of 46 memorandums of understanding, partnerships signed during Yoon’s state visitBy Moon Joon-hyun
Published : Oct. 23, 2023 - 15:41
Hyundai Motor Group announced Monday it has entered into a joint venture agreement with Saudi Arabia's Public Investment Fund (PIF) to construct its first-ever automobile assembly plant in Saudi Arabia and expand its presence in the Middle Eastern market.
This announcement came as part of a broader initiative that saw 46 memorandums of understanding and joint partnerships signed between South Korean companies and Saudi Arabian counterparts during President Yoon Suk Yeol's state visit to Saudi Arabia last weekend.
The agreements span across various sectors including energy, infrastructure and new industries in alignment with Saudi Arabia's “Vision 2030” initiative that aims to diversify the nation's economy and reduce its reliance on oil.
These partnerships are also in step with South Korea's goal of leveraging its cutting-edge technology and industrial development experience with Saudi Arabia's fiscal strength and growth prospects.
The signing ceremony for Hyundai’s auto plant took place at the Saudi-Korea Investment Forum held at the Fairmont Hotel in Riyadh, with notable attendees including Hyundai Motor Group Executive Chair Chung Euisun, Hyundai Motor President Jang Jae-hoon, PIF Governor Yasir Al-Rumayyan, and PIF Deputy Governor Yazeed Alhumied.
The partners will establish a Completely Knocked Down (CKD) plant in King Abdullah Economic City, approximately 100 kilometers from Jeddah -- Saudi Arabia's second-largest city and main trading port. This facility will focus on importing and assembling car parts as opposed to manufacturing them in-house, with an anticipated annual production capacity of 50,000 electric and gas vehicles.
"We are setting out to put sustainability and innovation at the forefront of the automotive industry in the region," said Hyundai Motor CEO Jang Jae-hoon.
Jointly investing over $500 million, Hyundai will hold a 30 percent stake in the plant, with PIF holding the remaining 70 percent. Construction is slated to begin in the first half of next year, with mass production commencing in the first half of 2026.
In addition to the factory joint venture, a slew of partnerships was forged during the Saudi-Korea Investment Forum held Sunday, with Yoon and some 400 business leaders of both countries in attendance.
Breaking down the 46 MOUs and deals by sector, seven were signed in the energy and power sector, eight in infrastructure and plants, which included Hyundai's assembly plant deal, 19 in manufacturing, 10 in new industries, and two in other areas including financial cooperation.
In the energy industry, several collaborations were established centered around the hydrogen sector, including a letter of intent by Korea Electric Power Corporation, Posco Holdings and Lotte Chemicals with petroleum refiner Saudi Aramco, the world's second-largest company by revenue, to produce blue ammonia at a total project cost of $15.5 billion. As a cleaner alternative, blue ammonia -- ammonia produced with carbon capture and storage -- supports global decarbonization efforts.
Hyundai Engineering & Construction also signed a memorandum with the Saudi Ministry of Investment, committing to investment cooperation in real estate and infrastructure sectors, as well as promoting smart city projects such as seawater desalination projects and the Neom city development project.
In addition, KG Mobility Consortium and Korean automobile parts manufacturer CTR signed memorandums to establish a supply chain for automobile parts and a local factory for electric vehicle parts, respectively. These initiative are set to contribute significantly to the comprehensive supply chain in the global automobile industry, following similar strides in the shipbuilding sector.
In the high-tech and manufacturing sectors, 19 cooperation agreements were inked, with notable deals including South Korean manufacturer BMT's joint venture for localizing fittings and valve manufacturing in Saudi. These are critical components used to regulate the flow of fluids or gases in pipes or tubes in industrial applications, most prominently for oil and gas.
Furthermore, business agreements were signed to construct smart farms, with Korean companies such as food and beverage maker Nongshim partnering with Saudi greenhouses.
During the forum, Korean government officials reaffirmed their commitment to actively support the 128 ongoing cooperative projects, including the 26 projects sealed at the previous investment forum in November, and the 56 initiatives identified during the 4th Korea-Saudi Vision 2030 Committee meeting earlier this month.
The support for these projects will be channeled through the Korea-Middle East Public-Private Joint Economic Development Committee.
[Herald Interview] Rival heir to Kim Ju-ae unlikely to appear: unification minister
Coupang reports first profitable year
Main opposition wrestles with exodus over nomination spat