Saudi Arabia
March 13, 2025
Salah Elkadiki, CEO of AMPO Arabia, talks to The Energy Year about plans to open a new manufacturing facility in Dammam that will double the company’s capabilities and production capacity, and plans to increase exports to MENA countries. Part of Spain’s AMPO Group, AMPO Arabia is a Saudi manufacturer of highly engineered valves for industrial applications in the oil and gas, water and mining sectors.
We understand that AMPO is planning to expand its manufacturing facility in Saudi Arabia. How will the company benefit from this expansion?
We are planning to expand our operations and are looking at Dammam 2nd Industrial City as the likely location for our next plant. It will be at least double the size of our current facility, and we expect to launch it in Q2 2026. In it, we will be able to manufacture valves of larger sizes and different varieties, and we will add more in-house capabilities, which is critical for our future strategy. Our existing facility is limited to manufacturing gate, globe, check and ball valves up to 24 inches, but the new facility will allow us to manufacture and service larger and higher-pressure class valves.
Could you outline AMPO Arabia’s approach to localising its manufacturing and overcoming supply chain challenges in Saudi Arabia?
The supply chain for valves in Saudi Arabia is currently evolving. It’s very much a horse-and-carriage situation, as the necessary components and infrastructure to support localised manufacturing of valves, such as castings, forged components and actuators, are not yet available locally.
Today, we still import the primary components for valves because domestic casting capabilities are limited or under development. We estimate it will take another 18-24 months before we see viable casting capabilities locally. Besides castings, specific components such as fasteners with specialised coatings, forged components and actuators are not yet fully manufactured domestically. We work with all of Aramco’s approved actuator suppliers including Rotork, AUMA, Bernard Controls, Rotex, Emerson and others. Most are making efforts to localise production and services.
Coatings are another critical area, particularly fusion-bonded epoxy coatings, which are essential for water applications in field-development projects such as Jafurah. We are also supporting the development of domestic coating capabilities, specifically with NOV Tuboscope and Zamil Coating, to ensure companies understand our needs as valve manufacturers.
Another significant challenge with local suppliers will be economic incentives. If domestic suppliers are 30% more expensive than our current suppliers, it becomes difficult to justify the switch to local. However, we are engaging with casting companies and helping to develop local foundries that can meet the high standards required, particularly by Aramco, and hope they will become our main source soon.
Meeting our IKTVA [In-Kingdom Total Value Add] commitments requires that more of these supply chain elements be established locally. While progress is being made, it will take time to build the capacity and depth needed to fully meet demand. We are optimistic that, as the ecosystem matures, we will see more of these critical components being manufactured in Saudi Arabia, ultimately strengthening our position and ability to add value.
What is AMPO Arabia’s role in Aramco’s major projects, and how do you manage the tight delivery timelines?
We are active in all the major projects – Jafurah, Zuluf, Marjan, Safaniyah and many others – and we have been involved in the Amiral petrochemicals complex since the engineering phase. Additionally, we have supported Amiral’s integration with the SATORP refinery, supplying many interconnection valves between existing and new facilities.
The Master Gas System project is strategically significant for us and Saudi Arabia. There is increased pressure on gas production projects to ensure sufficient supply to meet rising demand, and Aramco is expediting these projects to meet timelines ahead of schedule, which creates challenges for us as we have to make accelerated deliveries. Valves are considered critical components for these projects and we are doing our best to ensure these projects get the valves they need from us.
Do you have plans to expand your integrated systems business and localise those technologies?
We have a new business segment dedicated to integrated systems and we are exploring the localisation of several new products that we currently manufacture in Spain. As part of our joint development agreements with Aramco, we aim to localise new technologies. We will have several new developments, primarily in automation and severe service applications.
On the systems side, we are focusing on high-integrity pressure protection and various types of processes that rely on valves. We are working on some mining applications with Ma’aden involving speciality angle valves with unique control systems. These new technologies are another reason for our expansion, as we will need to dedicate space and resources to them.
Does AMPO Arabia have strategies in place to diversify its customer base beyond Aramco, particularly in the emerging hydrogen and renewable energy segments?
Right now, about 90% of our business is directed to Aramco, and the rest is customers such as Ma’aden, the Saudi Water Authority and their affiliates. SABIC is still not a key client, but petrochemicals is one of our core strengths and we aim to expand in this segment.
We are in the process of gaining approval from Air Products, which would open doors for participating in hydrogen projects. We also acquired the rights for Clarke Valve’s dilating-disk valves. These are innovative valves designed with high efficiency and zero emissions in mind and serve a multitude of applications in the oil and gas, renewables and industrial gases sectors.
The agreement allows AMPO to be Clarke’s exclusive manufacturer and distributor globally. As we develop new technologies, we try to introduce them to the Saudi market, ideally through the right technical partners and joint development programmes with key end users.
How do you plan to distribute your efforts among the oil and gas, mining and water segments in the coming years?
Our future revenue streams look to be more in gas. Jafurah, for example, is worth more than EUR 20 billion in projects over at least the next 10 years. We are serving many of the local oil and gas players – modular skid manufacturers such as SISCO, Gas Arabian Services, Petronash, Zamil Industrial and others. I would say oil will probably be at least 30% of our business, around 45% will be gas and the rest will be the mining and water sectors.
What impact does your status as an Aramco-approved manufacturer have on your regional and domestic reputation?
I think that the main thing that stands out is the quality of your product and being a reliable manufacturer. If you have Aramco approval, however, it is easier to cater to other markets in the region. In Iraq, for example, Aramco’s approval is very important. The same applies in Qatar and Bahrain; Aramco’s approval is a benchmark when doing business in the oil and gas sector. Additionally, we have a corporate procurement agreement with Aramco, which further confirms our commitment to supporting Aramco’s projects and the domestic industry.
We are pleased with our performance so far and our ability to meet the needs of our key domestic clients. Most of our business is with domestic and international EPCs such as Nesma & Partners Contracting, Bin Quraya Construction, RTCC and the CAT Group, as well as with the likes of Técnicas Reunidas, Saipem, Technip Energies, Larsen & Toubro and others.
We help them deliver their projects on schedule, we maintain a high level of quality assurance and they are satisfied with our work and local support. Maintaining our reputation is crucial. We aim to continue growing with the market and scaling up as needed while meeting our clients’ expectations.
Do you plan to grow outside Saudi Arabia and expand into regional markets?
The Saudi market has been busy and the volume of business hasn’t permitted us to seriously consider exporting. That is one of the reasons for expanding our plant in Dammam. We have supported some projects in Bahrain and Qatar, and we are exploring business in Iraq.
Kuwait is another market we wish to pursue. The number of projects that are a good fit for us in Kuwait has not been great in the past few years, but we are anticipating that things will pick up soon. Our next step will be to find the right partners in these territories to enable our market entry. In the future, I expect we will be exporting around 20% of our production to the MENA region.
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