The news of China Haicheng Guangzhou Company signing an engineering service contract with Saudi Arabia's Al Reef Sugar Refinery was sent via official WeChat. For this refinery located in the Gizan Economic City of Saudi Arabia, this is the first true signal of resumption of work in four years.

Looking north from the Red Sea coast, the outline of the Jizan Industrial Zone trembled slightly in the heat wave. In 2019, the largest refined sugar project in the Middle East was established here, with a daily production capacity of 3000 tons and an annual output of 1 million tons. The installation of the factory building and tower structure is nearing completion. Everything that followed abruptly came to an end. The military conflict at the Yemen border, the disruption of the global supply chain, and the withdrawal of international contractors have caused this factory, which is only one step away from the door, to come to a long standstill.

Four years later, can the entry of Chinese engineering management bring it back to life?

Half paralyzed construction site on the border

Jizan Economic City is located in the southwest corner of Saudi Arabia, bordering Yemen. At the end of 2019, when the main factory buildings and tower structures were installed, this was still a star plot for Saudi industrial investment. But the sudden tension in the security situation changed all the pace.

The threat of cross-border attacks by Houthi militants in Yemen has forced international contractors to reduce their on-site personnel, and subsequent mechanical and electrical installation work cannot proceed as planned. Since 2020, the global pandemic has exacerbated supply chain disruptions - critical equipment has been stranded at ports, commissioning engineers are unable to enter the country, and visa approvals have stalled. The finishing work, which originally only took a few months to complete, has been indefinitely delayed.

By 2022, this factory, which invested billions of dollars, has completely entered a semi paralyzed state. According to internal documents of owner Al Reef Sugar, the completed portion only accounts for about 60% of the total project volume, and a large amount of software and hardware debugging for the control system has never been initiated.

Debt, Restructuring, and Stranded Equity Transactions

Physical completion does not equal commercial completion. As the project came to a halt, the funding chain began to crack in the opposite direction.

The Saudi Industrial Development Fund (SIDF) is the main creditor of the project. According to multiple disclosures between 2024 and 2025, Al Reef Sugar's major shareholders have received an ultimatum from SIDF for failing to fulfill their loan guarantee obligations totaling hundreds of millions of Saudi riyals on time.

In November 2026, the Jizan Commercial Court ruled that the project would enter the judicial restructuring process. According to the ruling, the project company is granted a maximum buffer period of 180 days, during which it is required to complete the introduction of new investors, formulate debt restructuring plans, or confirm the resumption of work roadmap.

The capital market once responded. In late December 2026, a Gulf region investment fund reached a preliminary intention to acquire equity from Al Reef Sugar. However, due to the failure to meet the prerequisites of the transaction within the specified time frame, which involved complex terms such as debt divestment and legal recourse delivery, the acquisition case was officially declared unsuccessful on December 29, 2026.

The overall sale was unsuccessful, leading to a sudden increase in liquidation pressure. The financial end of the project has entered the final window period.

Transfer: Engineering management enters first

Against the backdrop of obstacles in both financing and equity transactions, substantial progress has been made in the engineering management sector.

On February 9, 2026, China Haicheng Guangzhou Company signed a contract to confirm entry. According to the contract, the Chinese team will provide full chain services from preliminary technical evaluation, design optimization to full process engineering management. This means that the project will first activate existing assets from a technical perspective - re evaluating the status of completed projects, sorting out the list of missing equipment, and prioritizing mechanical and electrical installation and system debugging.

Engineering professionals familiar with the project pointed out that the core process section of the refinery has a high degree of automation, and the four-year shutdown has caused varying degrees of damage to the control system, instrument valves, insulation pipelines, etc. The intervention of China Haicheng requires first completing a complete round of technical due diligence, which is not only a prerequisite for resuming work, but also a key bargaining chip to demonstrate project controllability to potential investors. Keywords: Middle East Latest News, Middle East News and Information

As of now, the owner has not announced any new progress in equity financing. The 180 day countdown to judicial restructuring is still ongoing. But on the edge of the desert in Gizan, the gates of the construction site are reopening.Editor/Gao Xue