Saudi Arabia remains the biggest market in the Middle East-Gulf region for local and world manufacturers. As an emerging market, the Kingdom presents several new opportunities for business growth and expansion.
The corporate sector in particular acknowledges that manufacturing opportunities are plentiful under the National Transformation Program 2020 the Kingdom has embarked upon in the light of Vision 2030.
One of the corporate giants that evinces increased interest in the Saudi market and looks forward to making new investments in it is Henkel, says Erdem Kocak, president of Henkel GCC and regional head of finance IMEA.
“As a company that holds globally leading market positions, we are very excited to be part of this market that continues to be on the rise,” Kocak told Arab News.
The Kingdom is a market with tremendous potential. The appetite for our products in this market shows no sign of abating and we are well placed to capitalize on this in the years ahead,” he added.
Currently, Henkel has established operations in Saudi Arabia, which include a manufacturing plant in Riyadh that produces the majority of its laundry and home care products for the region and boasts a strong talented local team.
“We invested heavily in our facilities in Riyadh by bringing state-of-the-art production facilities to further develop the Kingdom as a supply hub for the GCC and potentially other regions,” Kocak said.
Speaking about Henkel’s Saudi investment plans, Kocak said: “We have invested more in our Riyadh plant, which will significantly increase our manufacturing capacity and production in the coming years. This investment was aimed at boosting our output, automation systems and efficiency to create new opportunities for our business across the Kingdom. The plant produces laundry and home care products for the GCC, some of which were exclusively innovated and developed for this region.”
Starting from 2015, the company is stated to have consolidated its distribution network for laundry and home care products, which has allowed it to build a stronger Saudi distribution infrastructure and maximized its potential through one key relationship in the Kingdom. 
Earlier this year, Henkel announced the acquisition of a range of major hair care brands with focus on the Middle East and Africa (MEA) and Eastern Europe markets.
With the acquisition, Henkel says, it is expanding its footprint in emerging markets and strengthens its position in some of the largest and fastest growing markets in the MEA and Eastern Europe.
The transaction includes a portfolio of brands with leading positions in the entry-level price segment. Its major brands focus on the shampoo segment. Key countries are Saudi Arabia in the GCC as well as Russia and Turkey.
Kocak said: “The Kingdom is currently one of the biggest markets for Henkel in this region. Strengthening our Saudi operations directly bolsters our business in the wider GCC region.”
Asked for the major challenges Henkel faces in this part of the world, Kocak said the entire IMEA region can be challenging due to social and political issues in addition to the different ways of working that vary across countries in the GCC.
“Some of the main challenges we face across the Kingdom specifically include regulations for customs, which we understand and appreciate. Over the years, Henkel GCC has learned to overcome these and our business has adapted to the Saudi market in order to capitalize on the opportunities available here,” he added.
Speaking about Henkel’s foray into the Saudi market, Kocak said the first production site for the brand DAC opened in Riyadh in 1982, a brand that was incepted at the time through a JV between Swedish and German partners.
“We currently have three production sites in Saudi Arabia. Our Riyadh plants alone produce the majority of Henkel’s laundry and home care products for other GCC markets. We are present in Jordan as well.”
Henkel also has a joint venture with its partner Polybit in the adhesive technology business unit with whom it operates a plant in the Eastern Province. Henkel also has another plant in the same area with its partner National Adhesives.
“These operations have proven to be successful from the beginning and contributed to the growth of the adhesives segment in the Kingdom and elsewhere in the GCC,” Kocak added.

Source: Arab News