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The Saudi National Automobile Manufacturing Company (SNAM) and the ¶¶Òõ¶ÌÊÓƵn Public Investment Fund (PIF) are working closely with South Korea’s Daewoo International, to establish an automobile manufacturing plant.
The plant to be located in the Kingdom is aimed to meet domestic demand and also cater for the ever increasing automobile export market in the Gulf region.
"Things are progressing well with a memorandum of understanding (MoU) signed, while the agreement deal is in the final stage," Park Kyung-Ho, manager Daewoo International, ¶¶Òõ¶ÌÊÓƵ, told Arab News on Thursday.
"We are close to complete the deal to build the car manufacturing plant at the Sudair Industrial City, a planned city strategically located approximately 120 km from Riyadh and 160 km from Qassim," Kyung-Ho said, adding that the plant will be capable of producing 150,000 cars a year by 2018.
Daewoo holds a 15 percent stake in the ambitious project, while SNAM has majority stake with 50 percent and PIF holds 35 percent stake, he said.
Under the deal, SNAM, PIF and Daewoo International will collectively invest approximately $1 billion to build the plant.
Earlier, Daewoo International floated a firm as the trading arm of POSCO, one of the largest steelmakers in the world that also has experience in operating auto plants abroad, which signed a memorandum of understanding (MoU) with PIF to help build an automobile plant in the resource-rich Kingdom.
As per the MoU, Daewoo International will oversee the entire process of assembly production beginning with the planning stage, including automobile design and parts procurement, while POSCO Engineering & Construction, the group’s construction arm, will participate in the actual building of the auto plant.
Notably, for the trading company, it may also mean the potential distribution of Korean auto industry technology and parts.
Working to this end, Daewoo and SNAM co-hosted a recruiting session for Saudi students pursuing higher studies in South Korea, which was held at Daewoo's headquarters in Songdo, west of the capital city of Seoul.
A large number of students attended the event, during which they were briefed about the upcoming automotive manufacturing unit.