Saudi Arabia: Discovering Business 2014-2015 - allurentis

124 Pages·2016·6.12 MB·English

Saudi Arabia
Saudi Arabia
2014|2015 Discovering Business
in association with
Copyright © Allurentis Limited 2014. All rights reserved.
Allurentis is delighted to have been involved in association with UK Trade & Investment and the Committee for International Trade on this, the second edition of Saudi Arabia -
Discovering Business, and would like to thank all sponsoring organisations for their kind contributions. Saudi Arabia is a hugely exciting market and with our deep rooted relationship
the potential for business is vast. We are confident that this publication will raise awareness with all readers and prove to be an invaluable resource.
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Contents 4
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Messages BI
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HRH Prince Mohammed bin Nawaf Al Saud: Kingdom of Saudi Arabia’s Ambassador to the UK 6 AR
Sir John Jenkins KCMG LVO: British Ambassador to the Kingdom of Saudi Arabia 8 DI
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Introduction S
Massive investment plans present huge opportunities for British business in Saudi Arabia 10
Facilitating Organisations
UK Trade & Investment 14
The Saudi Committee for International Trade: Strengthening ties and creating opportunities 18
Saudi-British Joint Business Council 21
Business - Legal - Finance
An overview of Saudi Arabia Business Law - Al Tamimi & Co. 22
Stock Exchange reform opens the door to direct international investment in
the Saudi economy 29
Insurance Market in Saudi Arabia - SABB Takaful 34
Energy
New refinery capacity and development of downstream petrochemicals industries
creates opportunities for international business 38
Rapid increase in electricity consumption driving major investment and
development of renewable power sources 43
Industry & Manufacturing
Major industrial and infrastructure developments create wealth of opportunities 47
New Economic Cities at the heart of drive to diversify the Saudi economy 51
Infrastructure - Construction - Civil Engineering
Port expansion reflects Saudi Arabia’s economic growth and key strategic location 56
Over 40 years in Saudi Arabia - Parsons Brinckerhoff 60
Huge investments being made to meet rapidly growing demand for secure water supply 63
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Mining
Exploiting the Kingdom’s vast mineral resources 67
Transport
New airport capacity being developed to meet growing passenger numbers and cargo volumes 71
Massive investment in new rail infrastructure 76
Yousuf M.A. Naghi & Sons Group 80
Retail
A young population drives expansion of retail sector 82
Healthcare
Population growth drives expansion of healthcare provision 88
Education
Need for skilled workforce behind major investment in modernising
Saudi Arabia’s education system 93
Defence & Security
Huge Saudi defence budget continues to represent major opportunity for UK business 97
British Offset - Saudi British Economic Offset Programme 101
Telecoms
Growing telecoms market offers substantial opportunities to international businesses 104
Tourism
The door has opened to foreign tourist visitors 108
Trade Organisations
British Expertise 112
The Middle East Association 114
Key Facts 116
Featured Contacts 118
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Map of cities & provinces
Iran
Arar Iraq
Jordan
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NNOORRTTHHEERRNN BBOORRDDEERRSS Kuwait
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Ha’il
HHAA’’IILL Dammam
Dhahran
Buraidah Al Khobar Persian
Egypt AAALL QQAASSSSIIMMM Gulf
Al-Hofuf
Riyadh
Medina
MMAADDIINNAAHH RRIIYYAADDHH UAE
MMAAKKKKAAHH
Jeddah Mecca
EEAASSTTEERRNN
Oman
AALL BBBBAAAAHHHAAAHHH
Sudan
Red Sea
AASSIIRR
NNAAJJRRAANN
Najran
JJIIZZAANN
Eritrea
Jazan
Yemen
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HRH Prince Mohammed bin Nawaf Al Saud:
Kingdom of Saudi Arabia’s Ambassador to the UK
I am delighted to be joining Sir John Jenkins in Our Kingdom is the 14th largest country in the world
providing a foreword to Discovering Business in Saudi and our abundance of natural resources has enabled
Arabia and in welcoming you to join us in business us to become one of the world’s fastest growing
and investment in the Kingdom. economies. We are the world’s largest producer and
exporter of oil and hold the largest proven oil reserves
This publication highlights the vibrant economic and
and we have made it our business to be a stabilising
investment relationship that exists between our two
force in terms of energy supplies.
Kingdoms and gives you a clear idea of the huge
opportunities for British business in Saudi Arabia in all We are the largest economy in the MENA region and a
sectors: from oil, gas, construction and finance to member of the G20, OPEC and the WTO. The World
education, health and housing. We hope it will inspire Bank has listed Saudi Arabia as one of the most
you to take the next step towards becoming a part of economically competitive and business friendly
this thriving relationship. nations in the world.
Under the leadership of the Custodian of the Two Holy We are in the midst of a massive development
Mosques, King Abdullah bin Abdulaziz, Saudi Arabia programme, building new industrial cities as well as
benefits from a strong, free economy and a stable and further developing our infrastructure to meet the
progressive government. needs of the 21st century. To achieve that necessary
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Friendship brings us together and is the bridge that
leads to better understanding and that can only lead to
better business.
growth, we need to diversify and to do that we need partners. We want which was witnessed by the Saudi Minister of Justice, Sheikh
to see UK business and investment at the heart of the Kingdom’s Muhammad Al Issa. The establishment of an Arbitration Centre in Saudi
economic development. Arabia has now been approved by the Kingdom’s Council of Ministers.
All important as that economic development is - and you will find it I also want to mention the Saudi-British Joint Committee. This
outlined within the pages of this magazine - it is underpinned by a important committee was successfully re-launched this year by three
political and cultural friendship between our two Kingdoms that goes British Ministers and by the Saudi Minister of Commerce and Industry,
back over a hundred years. We have supported one another in times of Dr Tawfiq Al Rabeeah. He also presided over and helped breathe new
trouble and celebrated our successes with one another. life into the Saudi-British Joint Business Council injecting dynamism
into our commercial relationship.
Friendship brings us together and is the bridge that leads to better
understanding and that can only lead to better business. Saudi Arabia has a history of sharing its wealth and working with other
countries and international organisations to help others achieve the
Our mission at the embassy here in London, is to help develop that
kind of prosperity we enjoy in the Kingdom. As the founder and unifier
bridge, to smooth the way for business. We are a fulcrum here to
of modern Saudi Arabia, King Abdulaziz, Ibn Saud, used to say: “A man
support you and the work done by independent business organisations
is not rich if his neighbours are poor”. In this global and evermore
like the Saudi Chambers of Commerce in the Kingdom and the Arab
connected economy, we are all neighbours.
British Chamber of Commerce in London. They have recently
established a joint not-for-profit Arbitration Partnership. My Embassy In the spirit of good neighbours let us continue to work together
was proud to host the signing of an Agreement to that effect last year, towards our mutual stability and success.
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Sir John Jenkins KCMG LVO:
British Ambassador to the Kingdom of Saudi Arabia
I am delighted to be invited once more to provide a also increasing and Saudi exports to the UK grew by
foreword to the Discovering Business in Saudi nearly 50% to £2.6 billion in 2013.
Arabia publication.
Saudi Arabia already has the largest market in the
The relationship between the UK and Saudi Arabia is MENA region, and has had a consistently high ranking
close and historic. It is important to both of us and in terms of ease of doing business. Saudi Arabia has
continues to flourish. Saudi Arabia remains our largest witnessed a period of relatively high growth and
trading partner in the Middle East and is designated a economic progress over the past few years. This has
high growth market by UK Trade & Investment, with a been based on a strong oil sector and record oil
significant number of high value opportunities.
revenues, allowing the Kingdom to increase public
The UK is the Kingdom’s second largest cumulative spending on infrastructure and welfare, to match the
investor, with over 200 joint ventures worth an increasing needs of a fast growing Saudi population. In
estimated £11.5 billion. UK exports of goods to Saudi turn the non-oil private sector is feeding off this upturn
Arabia rose by 29% in 2013 to £4.2 billion, and more in public spending and the Saudi economy is
UK firms are actively seeking to establish a physical diversifying away from its traditional sector strengths
presence in the Kingdom in order to gain a foothold in with massive development and investment throughout
this high growth market. Saudi investment in the UK is the Kingdom across a wide range of new and
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The relationship between the UK and Saudi Arabia is
close and historic. It is important to both of us and
continues to flourish.
developing sectors, such as healthcare, education, construction and business in the Kingdom. This publication will be distributed at major
manufacturing. The Government is encouraging the growth of the conferences, trade missions and road shows connected to Saudi
private sector and foreign investment through new initiatives and the Arabia and will also be available online. The overviews of key sectors
opening up of previously restricted industries. and business opportunities have been updated. They offer a detailed
view of high value projects and opportunities and will direct readers to
There are growing opportunities for both established and innovative
sources of information, advice and support.
businesses of all sizes. Many UK firms have already benefited from
establishing themselves in the Kingdom, particularly where they have UK Trade & Investment have a significant presence in Saudi Arabia,
been able to invest in vocational and technical training in support of
with offices in Riyadh, Jeddah and Al Khobar, with a wide range of
Saudisation, a Saudi policy concentrating on creating more
sector expertise available to assist and advise UK companies. I
employment opportunities for Saudi citizens and reducing dependance
encourage companies wishing to enter and compete in the Saudi
on imported labour.
market to contact the UKTI team and look forward to celebrating even
‘Discovering Business in Saudi Arabia 2014|2015’ will reach a wide more British successes in this important growth market. I hope you find
target audience of companies and individuals interested in doing this guide useful.
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Massive investment plans
present huge opportunities for British
business in Saudi Arabia
Saudi Arabia has a fast growing economy, built principally on its huge investor in Saudi Arabia after the US, according to UKTI, with a total of
petrochemical industry, and represents a large and growing market for approximately 200 UK/Saudi joint ventures, representing a total
British businesses, being the UK’s largest trading partner in the Gulf investment of more than US$18 billion.
region. At the same time, it is also one of the biggest foreign investors
“We recommend that the (UK) Government facilitate a leading role for
in the UK, with estimates suggesting that the total value of Saudi
British businesses in international consortiums to bid for projects in
investment in the UK, is more than US$100 billion.
Saudi Arabia”, says the Foreign Affairs Committee’s Report. “Given the
That closeness between the UK and Saudi Arabia was reflected in the large scale opportunities available, we see no reason why the UK
conclusions by the House of Commons Foreign Affairs Committee in should not set ambitious targets for growth in UK-Saudi trade and
its review of relations with the Kingdom, published in November 2013, investment”, it added.
which recognised the importance of the relationship and noted that Confirmation that there were indeed large scale opportunities for
“the growing Saudi market and the Saudi Government’s spending British business came in May 2014, when Abdullatif Al-Othman,
plans offer huge opportunities for British business across a wide range Governor of the Saudi Arabian General Investment Authority (SAGIA),
of sectors”. the body established to encourage investment in the Kingdom, visited
London along with Saudi officials to meet British companies and
Setting the scene, the report notes that Saudi Arabia is already the UK’s
outline opportunities in major rail, healthcare and construction
largest market in the Middle East, comprising 20% of our exports in
projects that are opening up in the Kingdom.
goods and services to the region in 2011, and it is our 18th largest
market globally, with US$12.5 billion in exports of goods and services “UK companies have an advantage in Saudi Arabia due to the long
in 2012. In addition, the UK is also the second largest cumulative standing relationship and understanding between our two countries”,
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