RIYADH (The Thursday Times) — Neom, a futuristic city being built in the northwest of Saudi Arabia, is fast becoming a dominant force in global construction. According to Manar Al Moneef, Neom’s chief investment officer, the mega-city is currently consuming an astonishing one-fifth of the world’s steel production. This revelation was shared at the Global Logistics Forum in Riyadh, where Al Moneef described Neom as a long-term driver of both global construction and logistics markets.
She highlighted the project’s immense appetite for materials, stating that Neom will continue to be the world’s largest customer for construction supplies in the coming decades. It is not just steel; Neom’s demand for elevators, cement, and other key materials is expected to continue driving global industries. Al Moneef emphasised the scale of this demand, estimating that Neom accounts for five percent of the global logistics market.
A future fuelled by logistics
The Neom project, valued at over $1.25 trillion, is poised to become a key player in the global logistics sector. With large sections of the city under construction, Neom’s requirements for transportation, infrastructure, and raw materials are vast. This has transformed the city into a magnet for investors, suppliers, and developers eager to be part of its futuristic vision.
To attract private investment, Neom has introduced financial guarantees and is setting up significant infrastructure hubs, such as a concrete hub worth over $180 million to support The Line, one of the city’s hallmark projects. While the focus is on completing critical parts of Neom by 2030, the entire project is slated for completion in 2045.
Neom’s steel dominance
The demand for steel alone is staggering, with Neom currently representing one-fifth of the global market. This sheer volume highlights the scale of its construction and the project’s reliance on materials crucial to building its ambitious cityscape. The city’s skyline will eventually include some of the world’s most advanced architectural feats, including The Line, a horizontal city designed to stretch over 100 miles once fully completed.
Economic challenges and shifting priorities
However, despite the grand vision, Neom has faced setbacks. Saudi Arabia’s Public Investment Fund (PIF), the primary financial backer of the project, has encountered funding pressures. Fluctuating oil prices have strained Saudi Arabia’s resources, and there is an increasing need to divert funds towards major international events such as the World Expo in 2030 and the 2034 World Cup, both of which will be hosted in Riyadh.
This financial squeeze has led to the delay of some Neom projects, with priority being shifted to completing sections of the city that are crucial to these global events. The Line, for instance, has been divided into smaller phases, with just a few miles scheduled to be completed by 2030, while the rest will continue to develop into the following decade.
Despite these challenges, Neom remains a cornerstone of Saudi Arabia’s long-term economic development plan. The city will also include Trojena, a futuristic winter resort, twelve luxury resorts named Magna, the Sindalah island resort, and the industrial city of Oxagon, which is set to play a key role in shaping Saudi Arabia’s industrial future.
