Hanwha’s Saudi Hub Fuels Local Energy Push & Supply Chain Resilience

By Stephanie Kelly | November 05, 2025

RIYADH, SAUDI ARABIA – Hanwha Power Systems (HPS) is doubling down on its commitment to the Middle Eastern market with a new compressor packaging and service center at King Salman Energy Park (SPARK) in Saudi Arabia. The facility, slated for operation in the first half of 2027, signals a strategic shift towards localized manufacturing, supply chain resilience, and alignment with Saudi Arabia’s ambitious Vision 2030 goals.

The agreement, signed during the ADIPEC 2025 conference in Abu Dhabi, will see HPS lease approximately 11,600 square meters within SPARK, a fully integrated energy city owned by Saudi Aramco. While the investment represents a significant expansion for the South Korean conglomerate, experts suggest it is more than just geographical growth – it's a calculated move within a rapidly evolving global energy landscape.

Riding the Wave of Localization

Saudi Arabia’s Vision 2030 is a national transformation plan aimed at diversifying the kingdom’s economy away from its reliance on oil. A core component of this vision is the development of a robust, localized industrial sector. “The push for local content is incredibly strong right now,” explains one industry analyst, speaking on background. “Saudi Arabia is no longer content with simply being a consumer of goods and services. They want to become a manufacturing hub, and they’re offering incentives – and demanding commitments – from foreign companies to make that happen.”

HPS’s investment directly addresses this demand. The new facility isn’t just about assembling compressors; it’s about building a complete ecosystem for packaging, service, and technical support, creating local jobs and fostering skills development. “This is a long-term commitment,” said a source familiar with the project. “HPS recognizes that to succeed in Saudi Arabia, you need to be an integral part of the local economy.”

Supply Chain Security in a Turbulent World

The decision to establish a local presence also reflects broader concerns about supply chain resilience. The COVID-19 pandemic and recent geopolitical events have exposed the vulnerabilities of relying on distant suppliers. “Companies are realizing that just-in-time manufacturing can quickly turn into just-in-case manufacturing,” notes a supply chain consultant. “Having a local facility allows HPS to reduce lead times, mitigate disruptions, and better serve its customers in the region.”

While HPS already boasts a strong global presence, the Saudi facility provides a crucial buffer against potential disruptions. By localizing production and service capabilities, the company can ensure a more stable and reliable supply of compressors to key industries such as oil and gas, petrochemicals, and carbon capture.

Competition Heats Up in Saudi Arabia’s Energy Sector

HPS isn’t alone in recognizing the opportunities presented by Saudi Arabia’s industrial transformation. Competitors such as GE and Siemens have also announced significant investments in local manufacturing and service facilities. “The competition is definitely heating up,” says another industry source. “Saudi Arabia is becoming a key battleground for energy technology companies.”

This increased competition is driving innovation and forcing companies to differentiate themselves. HPS hopes to stand out by offering a comprehensive suite of services, including custom engineering, on-site maintenance, and remote monitoring. The facility will also serve as a training center for local technicians, ensuring a skilled workforce to support the company’s operations.

SPARK: The Engine of Saudi Arabia’s Energy Future

The choice of SPARK as the location for the new facility is also strategic. The energy park is designed to attract foreign investment and foster collaboration between energy companies. It offers a range of incentives, including tax breaks, streamlined regulations, and access to world-class infrastructure.

“SPARK is becoming the engine of Saudi Arabia’s energy future,” says one observer. “It’s a one-stop shop for companies looking to establish a presence in the kingdom. The park provides a supportive ecosystem that encourages innovation and growth.”

SPARK's integration with Saudi Aramco provides HPS with a significant advantage, facilitating access to potential customers, technology partners, and industry expertise. The location also allows the company to tap into a skilled workforce and benefit from a favorable business environment.

Looking Ahead: A Long-Term Commitment

HPS's investment in Saudi Arabia represents a long-term commitment to the region. The company is not only expanding its geographical footprint but also aligning its business strategy with the kingdom's vision for a diversified and sustainable economy.

“This isn’t just about short-term profits,” explains an HPS spokesperson. “We believe that Saudi Arabia has the potential to become a major energy hub, and we want to be a part of that journey. We are committed to investing in the local economy, creating jobs, and fostering innovation.”

The new compressor facility is expected to create numerous jobs for Saudi nationals, contributing to the kingdom’s goal of increasing employment opportunities for its citizens. HPS is also committed to training and developing local talent, ensuring a skilled workforce to support its operations and contribute to the growth of the Saudi economy.

As Saudi Arabia continues to transform its economy and embrace new technologies, companies like HPS that are willing to invest in the local market and align their strategies with the kingdom’s vision are likely to reap the rewards. The future of energy in the Middle East is being shaped today, and HPS is positioning itself to be a key player in that future.