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RIYADH: Oxagon, the industrial cornerstone of NEOM, has consolidated its position as a vital logistics and manufacturing hub, fully in line with Saudi Arabia’s Vision 2030.

Through a combination of innovation, sustainability and technological advancement, Oxagon has become a global model for future industrial development. Spanning approximately 50 square kilometres, the project is among the largest floating industrial parks worldwide, and is on track to achieve 100 percent renewable energy use by 2030.

The 2024 achievements underscore Oxagon’s commitment to economic diversification and environmental responsibility, offering valuable lessons for businesses. By prioritizing sustainability, embracing cutting-edge technologies, and demonstrating adaptability, Oxagon is setting new standards for the logistics and manufacturing sectors.

Sustainability leadership

Oxagon stands as a beacon of sustainable practices in logistics and manufacturing. Paolo Carlomagno, Partner at Arthur D. Little Middle East, said that Oxagon’s initiatives are consistent with the core objectives of Saudi Vision 2030, which aims to create a diversified economy while reducing environmental impact.

“For example, Oxagon’s logistics operations integrate renewable energy sources, such as solar and wind, which have collectively reduced carbon emissions by an estimated 25 percent compared to conventional models,” Carlomagno explained.

“In addition, the manufacturing ecosystem embraces circular economy principles, focusing on resource efficiency and waste minimization. By 2026, Oxagon’s waste-to-resource initiatives are expected to result in the recycling of 90 percent of the industrial waste generated within the facility,” he added.

Carlomagno also stressed that advanced systems such as green building technologies and smart water management are an integral part of Oxagon’s strategy to reduce its environmental footprint.

“For example, Oxagon uses advanced desalination technologies that use 40 percent less energy than traditional methods, providing a sustainable water supply for both industrial processes and local communities,” he noted. “These efforts create a resilient, environmentally friendly industrial ecosystem capable of adapting to future challenges.”

Collaboration is a key element of Oxagon’s strategy, with partnerships with global companies such as Siemens and Schneider Electric driving the accelerated adoption of sustainable practices.

“These collaborations have led to the implementation of innovative solutions, such as energy-efficient manufacturing systems and low-carbon supply chain logistics, setting a standard for the region and beyond,” he added.

Technological innovations

In 2024, Oxagon continues to leverage cutting-edge technology to revolutionize logistics and manufacturing operations. Technologies such as artificial intelligence, robotics and the Internet of Things have played a critical role in streamlining operations, enhancing predictive maintenance and improving inventory management, leading to efficiency gains of about 30 percent compared to 2023, Carlomagno noted.

“One notable development has been the integration of autonomous electric vehicles within its logistics network. These vehicles, combined with AI-based route optimization algorithms, have reduced delivery times by 20 percent and operating costs by 15 percent.

“In addition, smart manufacturing centers equipped with IoT-enabled machines have increased production accuracy by 25 percent, while reducing downtime through predictive maintenance protocols.”

Looking to the future, Carlomagno highlighted that Oxagon’s commitment to emerging technologies promises further disruption to the industry.

“Adopting blockchain for transparent supply chain management is expected to reduce fraud and improve traceability, while quantum computing – currently under exploration – offers the ability to solve complex logistics challenges at unprecedented speeds. Such innovations are expected to drive annual growth A 10 percent increase in Oxagon’s industrial production is expected over the next five years.

Federico Benovi, Chief Business Officer and CEO of Asia Pacific, Middle East and North Africa at Globant, explained Oxagon’s use of AI-based analytics, blockchain-enabled supply chain management and autonomous systems to create a highly connected and efficient operational ecosystem. These developments have improved transparency, reduced inefficiencies, and streamlined processes, enabling smarter decisions to be made.

“For example, artificial intelligence and machine learning have played pivotal roles in logistics, enabling predictive models to optimize shipping schedules. By analyzing port availability in real-time, these systems ensure accurate ship departures and arrivals, avoiding costly delays and idle time. Likewise Blockchain technology ensures supply chain transparency, building trust and resilience across global operations.

In manufacturing, robots, powered by artificial intelligence, have revolutionized production lines, offering unparalleled accuracy, scalability, and flexibility.

“IoT sensors have raised predictive maintenance to a new level, reducing downtime and enhancing overall equipment efficiency. Combined, these innovations lead to increased product quality, innovative business models, and smarter scalability.”

Looking to the future, Benovi emphasized that Oxagon’s connected experiences will further enhance operations, not only in factories and logistics but also for employees. By integrating data from IoT, AI, and machine learning, Oxagon delivers seamless workflow while maintaining a people-centric approach, improving employee satisfaction, operational agility, and productivity.

Evolving market dynamics

As global markets evolve, Oxagon provides a model for how companies can adapt and thrive. Carlomagno pointed out that Oxagon’s strategy revolves around three basic pillars: collaboration, sustainability and digital transformation. By forming strategic partnerships with technology providers, academic institutions and multinational corporations, Oxagon has positioned itself as a hub for innovation.

“For example, a partnership with MIT made it possible to create a data-driven logistics optimization platform that increased supply chain efficiency by 15 percent,” he said.

Oxagon’s consumer-focused approach also sets it apart. By leveraging data analytics and consumer feedback loops, the company ensures that its products and services meet evolving market demands.

“For example, real-time demand forecasting has allowed Oxagon partners to reduce inventory holding costs by 20 percent, reflecting their flexibility in a dynamic global market,” Carlomagno said.

Benovi stressed that adopting digital transformation is a crucial strategy for achieving future success.

“Oxagon has put advanced technologies such as artificial intelligence, the Internet of Things, edge computing and automation at the heart of its operations. By incorporating predictive AI models, Oxagon has improved its supply chain management, enabling it to forecast demand and identify the most efficient logistics routes.

“At the same time, powerful IoT sensors and platforms have high operational efficiency, improve product quality, and enhance risk mitigation efforts,” the CEO added. These technologies have not only transformed manufacturing and logistics, but also paved the way for connected experiences, where personal insights enhance decision-making across operations.

Sustainability remains a key pillar of Oxagon’s strategy. “By incorporating the principles of the circular economy, Oxagon has redefined what it means to operate in an environmentally conscious way, in line with the growing consumer demand for responsible and environmentally friendly brands. Its sustainability efforts are not only a corporate responsibility but also a strategic driver for differentiation in the global market.”

In an increasingly digital business environment, Benovi highlighted the increasing importance of data privacy and cybersecurity.

“Oxagon’s commitment to complying with regulations, such as the National Control Act (NCA) in Saudi Arabia and international standards, underscores its focus on maintaining trust and ensuring safe operations,” he concluded.

As global business becomes more interconnected, Oxagon’s initiatives in 2024 provide a powerful model for how companies can successfully adapt by integrating innovation, sustainability and collaboration.