Market Trends of KSA Manned Security Industry
Growing Construction Activity in the Commercial and Industrial Domain is Expected to Drive the Market
- The Kingdom of Saudi Arabia has undertaken multiple transformations and modernization initiatives in recent years. This transformation has been particularly evident in its rapid and substantial economic growth, notably within the commercial and industrial sectors.
- The increase in construction activity is driven by significant investments in housing, tourism, renewable energy, transportation, and other projects that align with the Vision 2030 program, the government's strategy to diversify the economy, reduce its dependence on oil, and expand public service sectors. Construction is essential in this approach. Hence, according to International Construction, Saudi Arabia significantly focuses on growing mega-city construction, with more than 5,200 active projects totaling USD 819 billion.
- The government's commitment to infrastructure development is one of the key aspects of Vision 2030. It encompasses transportation, logistics, utilities, and more. Major projects like the Riyadh Metro, NEOM city development, and the expansion of industrial zones have created a need for increased security measures.
- The Vision 2030 initiative has been a key driver for substantial investments. These investments are reshaping the Kingdom's infrastructure and urban landscape, creating a rise in construction activity. The NEOM project, with its substantial USD 500 billion The Line smart city initiative, signifies Saudi Arabia's commitment to innovative urban living, sustainability, and renewable energy. The country witnessed a substantial increase in its construction sector, particularly in the value of awarded contracts, providing further evidence of the growing construction activity in the commercial and industrial domains within the Kingdom.
- Moreover, according to the General Authority for Statistics (GASTAT) database, in 2021, the operating revenues in the construction industry amounted to around SAR 330.2 billion (USD 88.026 billion), a 7.69% rise in revenues. This surge in construction activity is one of the primary drivers of the increased demand for security personnel and solutions.
- The country has witnessed significant growth and development in construction activity in recent years. This robust expansion has led to an increased demand for security services to safeguard assets, personnel, and critical infrastructure. As a result, the manned security market in the Kingdom is expected to witness significant growth, driven primarily by the rapid construction activity within the commercial and industrial domains.
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Industrial Segment is Expected to Hold Significant Market Share
- The demand for manned security services in the industrial sector is primarily driven by the increasing focus of industrial and manufacturing companies to protect manufacturing sites, factories, and industrial warehouses effectively. The industrial segment of the KSA manned security market tracks the revenue accrued from physical manned security services offered by market vendors to industrial buildings, including manufacturing facilities, workshop facilities, and industrial warehouses.
- Industrial sites, factories, manufacturing plants, and similar types of properties hold extremely expensive machinery and equipment. Industrial warehouses, factories, and construction zones are commonly struck by criminal activity because of the location's remoteness and the sites' vastness. Manned security personnel are prepared for theft, vandalism, and break-ins and are trained to handle situations that call for a physical presence.
- The Ministry of Industry and Mineral Resources of the country stated in May 2023 that in the final quarter of FY 2022, licenses were issued to 248 industrial units and 150 factories with an investment volume of USD 59 million. This resulted in 10,518 total operating factories in 2022 compared to 8,499 in FY 2021 in the country, showing the growth of the industrial sector. This is expected to create an opportunity for security guarding services, supported by the trend of outsourcing manned security services by the industries due to their non-core functionalities.
- Furthermore, the Ministry of Industry and Mineral Resources (MIM) announced that 80 new factories had started production in Saudi Arabia in February 2023 with an invested amount of SAR 4.3 billion (USD 1.15 billion). The Ministry stated that it issued 85 industrial licenses distributed through 9 administrative regions during February, noting the investment value in the new licenses amounted to SAR 1.9 billion (USD 0.51 billion).
- Moreover, the country has witnessed significant growth in the presence of industrial companies and the establishment of new manufacturing facilities over the past few years. This has significantly necessitated the demand for security services in the industrial premises across the Kingdom.
- Furthermore, the country is home to manned security services companies, such as Alfareeq, Nesma United Industries, and Sharaf Din Group of Companies, focused on providing security services to the industrial sector. For instance, Nesma United Industries' Industrial Security Division provides full security solutions to meet clients' specific needs. Over the years, the division has provided its Physical Guards services to Industrial and Petrochemical Plants and oil and gas companies across the Kingdom of Saudi Arabia.
