What does Local Content mean?
Local content is defined as the development of local skills, technology transfer alongside the use of local manpower and local manufacturing. Local Content is a strategy that focuses on the country's fundamentals In order to reach a significant level of socio-economic progressiveness and sustainability. According to the Local Content and Government Procurement Authority (LCGPA) in KSA, local content is defined as the total expenditure in the Kingdom of Saudi Arabia on Saudi components within the areas of labor, goods, services, assets and technology.
Why does Local Content matter?
For the past 15 years, there has been a steady increase in localizing the source of goods, services as well as labour. The need for local content crystallized during the COVID-19 pandemic which caused all supply chain processes to suffer immensely. Below are a few major reasons as to why local content is important:
- Adds greater value to the Kingdom
- Sustains the business
- Risk mitigation of material shortage
- Secures supply chain
What AVK SVMC does to support Local Content?
1-Strategic business partnership with ARAMCO
- ARAMCO approved since 1999
- IKTVA certified 2018
- 10 years IKTVA plan agreed with ARAMCO
- Joint product development with ARAMCO
2-Local Supply Chain
- Shifting procurement towards local suppliers
- Increased value adding locally
- Agreement with local foundries and component suppliers
- Development of local suppliers
- Knowledge transfer
- Technical training
- Develop and educate local suppliers to meet international customers’ needs and requirements.
- Provide opportunity for Saudi foundries to supply the AVK group internationally
3-Engineering Graduate Program
- Graduate programs anchored with senior management
- Saudis being fast tracked into key manger positions (Product Manager, Quality Manager, Production Manager, Project Manager)
4-Technician Graduate Program
- Focus on building in-house competencies for additional localization and expansion
5-Investment in Capacity and Knowledge Transfer
- Build new factory, distribution centre to support the growth in Saudi Arabia.
- Transfer latest production technologies within the AVK group to Saudi Arabia, such as automation, coating and testing.
- Transfer production of products already produced by AVK, but previously bought in.
- Double capacity of existing products
- Increase size range for products produced in Saudi Arabia
- Increase share of export to GCC countries
- Build and develop local capabilities within SMART water solutions to ensure AVK are the market leaders within our scope of products.
AVK SVMC is committed to continue to increase our investments locally in Saudi Arabia and play our part in the Kingdom to fulfil the 2030 vision.