Daikin’s New Jeddah Factory and Abha’s Green Highlands: How Saudi Arabia Is Cooling Its Tourism Boom Under Vision 2030

Published: November 28, 2025

Saudi Arabia’s transformation took two very different but closely linked turns this week. In Jeddah, Japanese HVAC giant Daikin began construction of a new chiller and hydronic heat pump factory designed to serve some of the region’s biggest mega-projects. In the southwestern city of Abha, a Los Angeles Times feature spotlighted how the kingdom’s lush mountain highlands are being remade as a flagship tourism destination — and how locals feel about the change. ^[1]

Together, these developments capture the next phase of Vision 2030: pairing nearly $1 trillion in tourism and infrastructure investment with localized, high-efficiency manufacturing to support a goal of 150 million visitors a year by 2030. ^[2]

Daikin Breaks Ground on an Advanced HVAC Factory in Jeddah

Daikin confirmed this week that it has started building a new manufacturing facility in Jeddah, supported by long‑time partner and Daikin Saudi Arabia chairman Tariq Almutlaq. The move is framed explicitly as a contribution to Saudi Arabia’s industrial capabilities and Vision 2030 agenda. ^[3]

According to the company’s global press release and regional coverage, the key points are: ^[4]

Groundbreaking took place on 26 November 2025 in Jeddah.
The facility will localize production of chillers and hydronic heat pumps for advanced cooling needs across the Kingdom and the wider Middle East.
It is positioned as part of a structured ramp‑up of Daikin’s regional operations, following:
- a UAE factory opened in 2014, and
- a Saudi factory in Sudair Industrial City (near Riyadh) in 2022, focused on air handling units and applied solutions.
Initial output will focus on large air‑cooled chillers, with the product portfolio set to expand as demand evolves.

Healthcare Middle East & Africa, which reported the news today (28 November), stresses that the Jeddah plant is explicitly intended to meet growing demand for energy‑efficient HVAC solutions not only in Saudi Arabia but across the wider Middle East, underlining the factory’s regional role. ^[5]

Built for Mega‑Projects and a Hotter Climate

Daikin’s senior leadership has been unusually clear about what — and who — this factory is for.

In the company’s official statement, Daikin Applied Europe COO Claudio Capozio says operations will run under the Production of Daikin System (PDS) framework, which combines lean manufacturing, stringent quality controls and continuous improvement. The facility will host advanced laboratories and test benches to perform full factory acceptance testing before any large chiller leaves the plant. ^[6]

In practical terms, that means:

Chillers and hydronic heat pumps can be tuned for the Gulf’s extreme heat and humidity, instead of importing equipment designed for milder climates.
Local production reduces lead times — critical for mega‑projects working on tight construction schedules.
Factory‑level testing helps large developments avoid the cost and delay of discovering performance issues only after installation.

Shinji Jodo, Managing Director of Daikin Arabia, directly links the investment to Saudi Arabia’s flagship projects, such as NEOM and the Red Sea development. These projects are driving “unprecedented demand for energy‑efficient infrastructure” and require industrial‑scale cooling that can operate reliably while helping the kingdom meet its emissions and efficiency targets. ^[7]

By building in Jeddah — closer to many Red Sea coast projects and to western Saudi Arabia’s fast‑growing cities — Daikin is positioning itself at the heart of a construction boom where cooling and decarbonization are no longer optional extras but core design constraints.

Why Cooling Capacity Is Now a Tourism Story

At first glance, an HVAC factory and tourism might seem like separate stories. Under Vision 2030, they are tightly intertwined.

Saudi Arabia has already surpassed its original goal of 100 million annual tourists, hitting that milestone in 2023 — seven years ahead of schedule, according to the IMF and official Saudi data. ^[8]

In response, Riyadh has:

Raised its target to 150 million visitors a year by 2030, with roughly one‑third expected to be international tourists. ^[9]
Announced nearly $1 trillion in tourism‑related projects, from giga‑projects like NEOM and the Red Sea to airport upgrades, entertainment districts and mountain resorts. ^[10]
Set tourism goals of 10% of GDP and 1.6 million jobs by 2030. ^[11]

All those visitors need comfortable hotels, malls, airports, hospitals and entertainment venues — in one of the hottest climates on earth. That makes cooling a critical enabler for tourism growth and a major source of energy demand.

The Jeddah factory therefore slots into a broader policy pivot:

Localizing production of core HVAC components to reduce imports and support industrial jobs.
Designing for efficiency from the factory floor upwards to limit the power and emissions footprint of tourism infrastructure.
Shortening supply chains so that mega‑projects can respond quickly to design changes or new regulations on energy use and refrigerants.

In other words, cooling capacity has become part of the tourism infrastructure story, not just an engineering side note.

In Saudi Arabia’s Green Highlands, a Different Kingdom Emerges

While Daikin digs foundations in Jeddah, another part of Vision 2030 is playing out high above the desert.

In a feature published today, the Los Angeles Times takes readers to Abha, the capital of the Asir region in southwestern Saudi Arabia. The city sits around 7,500 feet above sea level, earning nicknames like the “Lady of the Fog” and the “Bride of the Mountain” thanks to its cool temperatures and cloud‑shrouded peaks. ^[12]

Key takeaways from the piece and related reporting: ^[13]

Abha’s emerald mountains and bracing winds stand in sharp contrast to the stereotypical image of Saudi sands and searing heat.
The city has become a domestic summer escape, drawing Saudis and Gulf residents looking to “touch the clouds” above Jabal Soudah, the country’s highest peak at nearly 9,900 feet.
Public spaces like Art Street and parks such as Al Sahab have been developed with theaters, festivals, cafes and photo‑ready viewpoints.
Traditional markets like Souq Al Thulatha still sell regional specialties — mangoes from Jazan, nuts, spices and Yemeni honey — even as new tourism infrastructure rises around them.

Behind the scenes, Abha and the wider Asir region are being positioned as a flagship mountain tourism hub:

The Public Investment Fund (PIF) is planning multiple tourist districts in prime highland locations, with wellness resorts, glamping pods, yoga retreats and golf courses. ^[14]
Plans call for a sixfold expansion of Abha International Airport and an ambition to attract 10 million visitors to Asir by 2030, creating thousands of jobs and boosting non‑oil GDP. ^[15]

If the Red Sea and NEOM are Vision 2030’s glossy, futuristic shop window, Abha is being marketed as something more grounded and “authentic” — a place to find misty forests, terraced farms and centuries‑old forts without leaving the Kingdom.

Locals Welcome Visitors — and Worry About What Comes Next

The LA Times feature also makes clear that not everyone in Abha is at ease with the pace and style of change. ^[16]

From the reporting and interviews:

Many residents welcome tourists and investment, seeing them as a path to better jobs, more services and global recognition.
Small business owners, such as café operators overlooking mountain viewpoints, say they are already seeing more foreign visitors and expect business to improve as projects come online.
At the same time, locals report rising rents and worry that the focus on luxury resorts will price out middle‑class Saudis and erode the area’s free‑spirited, outdoorsy culture.
Long‑time campers say some of their favorite rustic spots are now fenced off or slated for development, and they doubt that the “old way of life” will fully survive once high‑end resorts dominate the most scenic locations.

These tensions echo wider debates about Vision 2030:

Saudi officials point to record tourism numbers and investment as proof that the strategy is working. ^[17]
At the same time, reporting this month shows that some of the most ambitious giga‑projects — especially The Line, the 100‑mile linear city in NEOM — are being scaled back or delayed as the government prioritizes financially viable initiatives and confronts budget pressures. ^[18]

Abha’s story, then, sits at the intersection of huge opportunity and very real anxieties: a test of whether Saudi Arabia can build a tourism economy that feels inclusive and sustainable rather than extractive and exclusive.

Manufacturing Meets the Mountains: What Today’s News Signals

Put together, today’s developments sketch out a clearer picture of where Vision 2030 is heading as the clock ticks down to 2030.

1. Vision 2030 is moving from announcements to hard infrastructure

The Daikin factory is a tangible example of industrial capacity building to support tourism and construction, not just another project announcement. It promises:

Local jobs in high‑value manufacturing, engineering and quality control.
Technology transfer around efficient cooling — critical in a country where air‑conditioning can account for a large share of electricity use.
Shorter, more resilient supply chains for everything from giga‑projects to hospitals and universities. ^[19]

2. Tourism is diversifying beyond ultra‑luxury and pilgrims

Recent comments by the tourism minister and broader coverage show Saudi Arabia now pushing a wider tourism mix: not just $2,000‑a‑night villas and religious pilgrimage, but mid‑market beachfront stays, mountain getaways, and urban short breaks. ^[20]

Abha’s highlands, with their cooler air and lower price point compared with ultra‑luxury Red Sea resorts, are a natural fit for that strategy.

3. Cooling demand is a climate and competitiveness issue

As millions more tourists arrive and new districts light up across the country, cooling load will surge if it isn’t carefully managed. A localized, high‑efficiency HVAC supply chain — symbolized by the Jeddah factory — is one of the few levers Saudi Arabia can pull to:

Keep electricity bills and subsidies under control.
Reduce the carbon footprint of its hospitality and real estate sectors.
Meet pledges around emissions and energy efficiency without slowing growth. ^[21]

4. The social license for Vision 2030 is not guaranteed

Abha’s residents are not rejecting tourism outright — far from it — but their concerns about access to nature, rising costs and cultural change are a reminder that local buy‑in matters. If new factories and resorts are seen as benefiting outsiders more than communities, friction will grow. ^[22]

What to Watch Next

As this story develops over the coming months and years, key questions include:

Timeline and scale for Daikin’s Jeddah plant
When will production fully start, and how many workers will the facility employ? Will Daikin add more product lines — such as water‑cooled chillers or data‑center cooling — if regional demand continues to grow? ^[23]
How Abha’s tourism mix evolves
Will future projects keep space for public parks, traditional markets and affordable guesthouses, or tilt heavily toward high‑end resorts? How will the planned airport expansion reshape visitor profiles and volumes? ^[24]
Whether cooling efficiency becomes a formal benchmark
As Saudi Arabia updates building codes and project requirements, will giga‑projects and hotel developers be required to hit specific energy‑use targets that favor the kinds of high‑efficiency systems Daikin plans to build locally? ^[25]
How the government balances ambition with fiscal reality
Scaling back or phasing some projects — while prioritizing those that create jobs and sustainable revenue — may prove essential to maintaining both domestic support and investor confidence. ^[26]

For now, the story of 28 November 2025 is one of convergence: a new factory in Jeddah being built to cool a country that is, quite literally, opening up — from Red Sea islands to fog‑wrapped mountain towns — to more visitors than ever before.

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