Nestlé is to build its first food factory in Saudi Arabia after signing a contract commiting to the project.

The Saudi Press Agency, the country’s state news agency, reported yesterday (15 September) that Nestlé has signed up for a 117,000 sq m plot in Jeddah’s Third Industrial City.

The site will focus on making infant-nutrition products when it opens next year. Nestlé is investing an initial SAR270m ($72m) on the project, the report said.

The announcement makes good on a promise made by the KitKat confectionery and Maggi sauces owner in late 2022 when it said it would invest SAR7bn in Saudi Arabia over ten years, including on the building of a manufacturing site.

At the time, Nestlé described the initiative then as a strategic move to grow its long-standing business in Saudi Arabia.

The plans also chimes with the country’s Vision 2030 strategy, which involves having more food produced locally as a food security measure.

The announcement yesterday from The Saudi Authority for Industrial Cities and Technology Zones (MODON) via the Saudi Press Agency said the project is expected to create hundreds of direct and indirect jobs during its first phase. The factory will have an initial annual production capacity of 15,000 tons.

Just Food has asked Nestlé for further details of its plans.

The country has been successful in attracting foreign investment in recent years.

Figures released late last year by the Saudi Central Bank showed the Kingdom’s foreign direct investment (FDI) inflows surged by 29.1% in the third quarter of 2023 compared to the previous three months.

FDI inflows reached SAR7.99bn, rising from SAR6.2bn recorded in the previous quarter.

Earlier this month, UK-based snacking major Pladis announced it is to establish a regional headquarters in the Kingdom.