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Saudi Arabia Prefabricated Buildings Industry Study - Growth, Trends, and Forecasts (2020 - 2025)

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  • 150 Pages
  • August 2020
  • Region: Saudi Arabia
  • Mordor Intelligence
  • ID: 5177285
The Prefabricated Building Market in Saudi Arabia is expected to grow at a CAGR of approximately 7.81% during the forecast period driven by the increasing construction activities across the country and the lack of affordable houses for expatriates working for the ongoing development projects in Saudi Arabia.

The prefabricated buildings industry was valued at SAR 9.71 billion in 2019 and is expected to grow during the forecast period. The prefab industry has seen constant growth during the study period. The revenue of the prefabricated buildings industry in 2016 has amounted to SAR 7.37 billion.

The residential construction industry in Saudi Arabia is facing a shortage of affordable housing as a result of a growing population and an influx of expatriates. This has encouraged the demand for prefabricated homes, as they are cost-effective and time-efficient. Furthermore, prefabricated buildings are more environmentally friendly than conventionally constructed buildings, as they do not generate any on-site waste. This is projected to positively influence the market demand in the upcoming years. Moreover, energy efficiency, design flexibility, and faster completion are some of the other advantages of prefabricated building, which are anticipated to drive the market growth.

Backed by the Ministry of Housing, the modular construction undertaking is relied upon to help Saudi Arabia’s homeownership strategy, which predicts 70% of residents owning homes by 2030. Moreover, Saudi Arabia’s recent budget shows that the government is focusing on infrastructural reforms as per the 2030 vision.

In Saudi Arabia, the housing shortfall is growing rapidly, and it is expected to grow to 2.4 million units by end of 2020. To address this deficit, the government established a Real Estate Development Fund, which developed various financing schemes to increase the home ownership rates. It also consolidated government land under the Ministry of Housing to accelerate the delivery of the 500,000 units announced through a royal decree. The Ministry of Housing recently started a PPP program to complement other housing delivery initiatives.

Moreover, supported by the Ministry of Housing, the modular construction project is expected to support Saudi Arabia’s homeownership strategy, which envisions 70% of citizens owning homes by 2030. The growth of modular construction is high in remote and rural areas, which is expected to have a significant impact on the overall market growth during the forecast period.

Key Market Trends

Concrete Holds the Major Share in Prefab Buildings Industry

Concrete holds a major share in the Saudi prefabricated buildings industry. Precast concrete buildings use precast RCC structural members, such as beams, slabs, columns, walls, staircases, and individual isolated footings.

The prefabricated buildings market in Saudi Arabia for concrete materials is estimated to be around SAR 3484.0 million in 2019. The use of precast components in construction has been highly common in Saudi Arabia for many years. The industry witnessed a majority of its growth in the past decade, along with increased investments and wide adoption of prefabrication techniques.

In the GCC region, the cement and concrete industry is significantly large, and it is supported by the various natural resources available in the region. Furthermore, in the region, among the numerous cement companies, Saudi Cement Company is one of the largest companies in the GCC region. The Saudi Arabian cement industry is the largest in the GCC region, with a production capacity of more than 45 million metric tons.

The country’s construction industry has been focusing on Vision 2030, which is primarily related rationalization of smart spending, while spending and creating new investment opportunities. Thus, the construction industry is focusing on the adoption of sustainable practices, and it is shifting toward environmentally friendly and less expensive building systems. Accordingly, precast concrete systems are finding opportunities in the market, primarily due to various benefits, such as low cost.

The precast concrete components are witnessing high demand from the housing sector. Furthermore, they are used in other sectors, as well as for the construction of industrial support facilities, hospitals, education facilities, and bridges..

Governments' Investments and Plans in Residential Housing to Boost the Prefab Industry

Factors, such as are growing construction activities, demand for affordable housing, social change, and a need to support the population with access to more plentiful and better-quality accommodation, are expected to drive the market growth in Saudi Arabia during the forecast period. Additionally, the rising trend of providing housing facilities, to migrant blue-collar laborers working on ongoing construction and industrial projects, is also expected to boost the demand for modular construction during the forecast period.

The unavailability of affordable housing, owing to population growth, along with an influx of expatriates, has encouraged the demand for prefabricated homes in Saudi Arabia. Rapid urbanization and upcoming infrastructural projects are projected to further provide a thrust to the market, for prefabricated structures in Saudi Arabia during the forecast period.

According to the Saudi Arabian housing ministry, an estimated 1.5 million houses must be built by 2030, to address the housing shortage in the country. The government is taking significant steps in addressing the shortage of affordable housing revenues from the While Land Tax, which is expected to contribute toward the funding of affordable housing projects.

Similarly, the Ministry of Housing’s ‘ESKAN’ project aims to add 500,000 units, to the total stock of the country’s affordable housing. King Salman urged the Housing Ministry to build suitable and affordable housing for citizens, as it is a government priority. The government issued legislation and has set aside a huge allocation in the budget for housing. Several important housing schemes are planned by the Ministry of Housing during the forecast period to build and support affordable housing namely ETNAM, WAFI, etc.

Increase in population growth, urbanization, and tourism are expected to drive growth in the building sector, especially in the residential and leisure markets.

Competitive Landscape

The report covers the major players operating in the Saudi Arabia Prefabricated Buildings Industry. The Saudi Arabia prefabricated building industry is moderately consolidated, with the major players having a significant share to influence the market.

Some of the major players in the Saudi Arabian market for prefabricated buildings are Red Sea Housing, Zamil industries, United Company for Caravans and Prefab Houses, Al-Shahin Metal Industries, and Kirby Building Systems are involved in both manufacturing and contracting activities of the prefabricated building market industry.

Apart from the top players, there are some major domestic companies that provide prefabricated building systems in the major cities across the country, such as Zamil Industrial investment co., Unifab United Company for Caravans, and prefab houses, and Al-Shahin Metal Industries. There is intensifying competition in the market due to various American and Chinese building systems in the market, which are offering fast construction of prefabricated buildings at a lower cost compared to traditional building systems.

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Table of Contents

1.1 Study Assumptions and Market Definitions
1.2 Scope of the Study
2.1 Analysis Methodology
2.2 Research Phases
4.1 Current Market Scenario
4.2 Technological Trends
4.3 Insights on Supply Chain/Value Chain Analysis of the Prefabricated Buildings Industry
4.4 Brief on Different Structures Used in the Prefabricated Buildings Industry in Saudi Arabia
4.5 Cost of Prefabricated Construction Technologies
4.6 Cost Analysis of Setting Up a Prefabricated Equipment Manufacturing Unit in Saudi Arabia
4.7 Brief Information About Construction Building Permits in Saudi Arabia, by Region
4.8 Ongoing and Upcoming Construction Projects in Saudi Arabia
5.1 Drivers
5.2 Restraints
5.3 Opportunitites
5.4 Porter's Five Forces Analysis
5.4.1 Bargaining Power of Suppliers
5.4.2 Bargaining Power of Consumers / Buyers
5.4.3 Threat of New Entrants
5.4.4 Threat of Substitute Products
5.4.5 Intensity of Competitive Rivalry
6.1 Material Type
6.1.1 Concrete
6.1.2 Glass
6.1.3 Metal
6.1.4 Timber
6.1.5 Other Material Types
6.2 Application
6.2.1 Residential
6.2.2 Commercial
6.2.3 Other Applications ( Industrial, Institutional, and Infrastructure)
7.1 Overview (Market Concentration and Major Players)
7.2 Company Profiles
7.2.1 Saudi Building Systems Mfg. Co.
7.2.2 Red Sea Housing Services
7.2.3 Kirby Building Systems
7.2.4 Zamil Industrial investment Co.
7.2.5 Unifab United Company for Caravans and Prefab Houses
7.2.6 Al-Shahin Metal Industries
7.2.7 Al Jazera Factory For Engineering Construction Co. Ltd.
7.2.8 Al Raziqiyah Factory For Metal Industries
7.2.9 Saudi Cement Company
7.2.10 Yanbu Cement *
9.1 Marcroeconomic Indicators (GDP breakdown by sector, Contribution of construction to economy, etc.)
9.2 Key Production , Consumption,Exports & import statistics of construction Materials

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Saudi Building Systems Mfg. Co.
  • Red Sea Housing Services
  • Kirby Building Systems
  • Zamil Industrial investment Co.
  • Unifab United Company for Caravans and Prefab Houses
  • Al-Shahin Metal Industries
  • Al Jazera Factory For Engineering Construction Co. Ltd.
  • Al Raziqiyah Factory For Metal Industries
  • Saudi Cement Company
  • Yanbu Cement *