Daikin Industries Ltd. has begun construction on a new manufacturing facility in Jeddah, Saudi Arabia, marking the Japanese air conditioning giant’s third factory in the Middle East as it seeks to capitalize on demand from the kingdom’s construction boom.
The Osaka-headquartered company said the plant, covering a 129,000-square-meter site, will initially produce large air-cooled chillers before expanding its product range. Daikin declined to disclose the investment amount or production capacity targets.
The facility follows the company’s 2022 opening of a factory in Sudair Industrial City near Riyadh and a Dubai plant established in 2014. Operations will be managed by Daikin Applied Europe.
Company executives framed the expansion as aligned with Saudi Arabia’s Vision 2030 development plan and tied to demand from mega-projects including NEOM and the Red Sea tourism development. However, the pace and scale of those ambitious projects has faced scrutiny as the kingdom recalibrates spending priorities.
Daikin reported record sales of €28.98 billion ($33.6 billion) for fiscal 2024 ending March 2025. The company employs over 103,000 workers globally.
The HVAC industry has increasingly localized production in the Gulf region to reduce logistics costs and meet local content requirements that governments have imposed on contractors.
