Extension of the mandatory list

The Local Content and Governmental Procurement Authority (LCGPA) announced the addition of new products to its National Product Mandatory List (NPML). Effective immediately, contractors working on publicly funded projects will be required to procure these goods from manufacturers considered “domestic”, subject to justified exceptions.

The new additions cover more than 1,500 products in 16 sectors. It is expected to reach 2,000 products by 2026 . This sectoral breadth increases the potential impact on companies that traditionally supply the public sector through direct imports:

• Pharmaceuticals and medical supplies
• Construction
• Medical supplies
• Hygiene products
• Works of art
• Food and agricultural products
• Chemicals
• Furniture
• Personal and household equipment and supplies
• Paper products
• Cybersecurity
• Information technology
• Plastic products
• Stationery and office supplies
• Transportation and logistics
• Sports and recreational equipment and accessories

Competition in public tenders shifts from the price and quality of the imported product to the degree of local content. In many tenders, products that are not manufactured or processed locally will be at a structural disadvantage or directly excluded if there is a certified national alternative.

The private market, however, remains open to direct imports, but is increasingly aligned with local content policies due to regulatory and reputational pressure.

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Strategic reconfiguration

To maintain and develop business in Saudi Arabia, foreign companies will need to adapt:

• Localize part of the value chain: license manufacturing, toll manufacturing, blending or assembly agreements with Saudi partners in order to qualify as a domestic product.

• Positioning as a technological partner: offering know-how, formulations and technical support while the industrial added value is materialized in the Saudi plant.

• Segment markets: in the public channel, address tenders where an offer with local content can be structured. In the private channel, preserve direct export as a “premium” or specialized solution.