Report highlights cooperation among govt. organizations in Saudi Arabia’s ascension to 11th rank worldwide on improvement in investment climate

Jeraisey hails Saudi Arabia’s progress, success in investment climate, economic investments

SABIC Chief says Kingdom’s progress in international competitive arena indicates economic reform success

The Chairman of Board of Directors of Riyadh Chamber of Commerce and Industry and Vice-President of the Council of Saudi Chambers of Commerce and Industry Abdulrahman Al-Jeraisey commended Saudi Arabia's strong economy and its ability for the improvement of investment competitiveness environment and its attraction of foreign investments.

'This has enabled the Kingdom of Saudi Arabia to rank 11th among 183 states in terms of investment competitiveness environment,' according to a report 'Doing Business' issued recently by the International Finance Corporation (IFC), an affiliate the World Bank.

In a statement to the Saudi Press Agency (SPA) this week, he said that the Kingdom's advance from the 13th rank last year to 11th rank this year highlights the great efforts made by Saudi Arabian General Investment Authority (SAGIA) and its success in its plan to put the Kingdom of Saudi Arabia on the list of top ten countries in the world in terms of investment competitiveness environment in implementation of the directives of the Custodian of the Two Holy Mosques King Abdullah Ibn Abdulaziz Al Saud.

Within its efforts to develop and strengthen economic cooperation between the Kingdom of Saudi Arabia and the United States, the Council of Saudi Chambers hosted recently a high-ranking U.S. trade delegation headed by Francisco Sanchez, U.S. Under Secretary of Commerce for International Trade, at a business meeting with Saudi businessmen in various sectors to discuss and review the overall economic relations between the two friendly countries.

The talks between the U.S. official along with the accompanying delegation of U.S. companies and Saudi businessmen also focused on means of developing bilateral ties and utilizing all the available opportunities and advantages for the development of trade exchange and the establishment of joint ventures, according to a latest press release of the Council of Saudi Chambers.

They also discussed aspects of trade and investment cooperation in the fields of energy and infrastructure between the business sectors in both countries, due to the great investment opportunities these sectors provide.

Head of the Saudi side, Saad Almaajal, a member of the Council of Saudi Chambers, said that there are many opportunities for trade and investment cooperation between the Kingdom of Saudi Arabia and the United States in a number of sectors, particularly petrochemicals, industry, and energy, pointing to the growing demand on energy, which the Kingdom represents one of its most important sources in the world.

He called for the need to increase non-oil exports between the two countries, considering the large size of the market in both countries, the unique geographical location of the Kingdom, the existing ports and the many export opportunities. He noted the strong ties between the two sides.

On his behalf, Francisco Sanchez, U.S. Under Secretary of Commerce for International Trade, said that the visit of the U.S. delegation to the Kingdom comes in the context of strengthening trade relations with the Kingdom - the main and strategic ally of the United States in the Middle East and to discuss potential business opportunities and explore ways of cooperation, especially in the sectors of energy and infrastructure.

He also noted the important role played by the activities of the Saudi and American private sectors in promoting and strengthening bilateral relations.

'The Kingdom is an important market for Americans, providing them with investment opportunities, and American companies also own great experiences that can contribute to transferring and nationalizing advanced technologies in various fields.'

He praised the role played by the Council of Saudi Chambers in the promotion of relations between the two countries through organizing visits of trade delegations between the two countries.

The participants at the meeting listened to 4 presentations about energy, electricity, minerals and investment environment, where the Chairman of the energy sector at the General Authority for Investment, Engineer Omar Al-Madhi, presented a brief overview of the features of the General Authority's strategy for Investment, which included, as he said, 3 major initiatives: the establishment of the National Center for competitiveness in order to promote the investment environment and make it attractive, as the centre helped, through a package of procedures in cooperation with government agencies, to reduce the investment procedures to gain access to best practice.

The second initiative is working on the development of transportation, energy and knowledge-related industries, where the General Authority worked on marketing the investment opportunities in this sector based on relative advantages. It also identified the size of those opportunities by about $500 billion. It established global offices for its marketing to local and foreign investors.

The third initiative is to create economic cities to achieve economic growth in less developed regions. Al-Madhi named the available investment opportunities at the energy sector and infrastructure in the Kingdom.

On his part, Abdulaziz al-Mansur of the Saudi Electricity Company explained to participants in the meeting, the company's policies and mechanisms to access electric power sector investment market and the conditions and available investment opportunities in this sector.

An official of Maaden Company addressed the available investment opportunities in the mining sector and reviewed the map of the Kingdom which shows metals and their location and importance globally in that field.

Nabil Issa from the famous law firm King and Spalding discussed aspects that make the Kingdom the ideal destination for foreign investments and he noted in this regard to lower energy costs, and advantages of setting up projects in the industrial cities in the Kingdom and the incentives they offer, in addition to the population, purchasing power, characteristics of climate and attractive investment environment.

The program also included bilateral meetings involving 15 American companies in addition to the Saudi companies where they discussed opportunities for business and investment partnership available in the energy and infrastructure sector, and they listened to presentations about these sectors in order to identify their available investment opportunities.

It should be noted that the file of Saudi-American economic ties is one of important files on the Council of Saudi Chambers' agenda as the United States is one of the largest and most important trading partners of the Kingdom.

The council has implemented many activities during the past year to support economic relations with most of the economic partners in the global economic scene including the United States.

These activities have clearly helped in providing appropriate opportunities for the growth and strengthening of trade and investment cooperation between the two countries, and in appreciation for those efforts, the Council of Chambers was granted an Award of Excellence in International Trade for the year 2010 granted by the U.S. Department of Commerce.

Amid much attention and interest from Arab and world decision makers and chemical industry leaders, Mohamed Al-Mady, Saudi Basic Industries Corporation (SABIC) Vice Chairman and CEO, and also Chairman of the Gulf Petrochemicals and Chemicals Association (GPCA), addressed the Fifth Annual GPCA Forum meeting in Dubai from December 7 through December 9.

Al-Mady highlighted in his December 8 keynote address that Gulf-based producers were able to continue implementing strategic moves during the economic downturn and said that now that the world economic situation has improved, the Gulf petrochemical industry would emerge as one of the strongest production hubs in the global industry.

He also noted that total capital investment in petrochemicals in the region was expected to reach $50 billion by 2015.

Al-Mady reviewed the role and contributions of GPCA since its inception in 2006. He outlined GPCA’s support to the industry by providing in-depth studies of the latest developments in global markets, as well as the association’s idea-sharing programs and representation of the common interests of all members. The high level of participation at this year’s Forum, he noted, was evidence of the association’s effectiveness and added that the organization continues to grow year after year.

GPCA Chairman Al-Mady also said, “The global trend currently pursued by major petrochemical companies is to focus on the search for feedstock availability as well as the proximity to markets for the export of their products. This is a competitive advantage,” he said, “that has helped the Gulf Region attract new investments in the petrochemical industry based on the availability of abundant feedstock in this region—as well as proximity to key emerging high-growth markets.”

This year the Forum focused on achieving growth and added value through innovation. Gulf-based producers have significant research and application centers located both in the region and around the world, Al-Mady noted. “We have seen the Gulf region attracting much attention from the global industry and significant new investment flows to nurture this promising industry in the region,” he said.

Al-Mady did not rule out challenges ahead for the industry, especially if the Gulf Region’s states do not provide feedstock and energy and adhere to global environmental standards, particularly those related to carbon dioxide emissions.

He also pointed out the successful decision by GPCA to join the international chemicals industry’s Responsible Care program, which is a global initiative for the manufacture of chemicals based on commitment to the highest international standards of environment, health and safety. This decision is in line with GPCA’s plans and objectives, he said, that has also led to the expansion in the number of companies joining GPCA.

Membership now stands at 146 companies, compared to 62 at the time the association was established in 2006.

GPCA membership includes seven of the world’s top ten chemical and petrochemical companies.

In the presence of Prince Saud bin Abdullah bin Thenayan Al-Saud, Chairman of the Royal Commission for Jubail and Yanbu and Chairman of SABIC; Prince Faisal Al-Saud, Advisor to the Ministry of Petroleum and Mineral Resources; and Dr. Abdullah A. Al-Othman, Rector of King Saud University; Mohamed Al-Mady, SABIC Vice Chairman and CEO, the Saudi Basic Industries Corporation (SABIC) signed a construction contract with El Seif Engineering Contracting Company to build a new SABIC Plastics Application Development Center (SPADC) at the Riyadh Techno Valley research complex inside the King Saud University (KSU) campus. The new facility will comprise an area of some 80,000 square meters, including about 43,000 square meters of building space.

The contract was signed on behalf of SABIC by Dr. Abdulrahman Al-Ubaid, Executive Vice President, Technology and Innovation, while Khaled bin Masa’ad El Seif, El Seif CEO, signed on behalf of his company. During the ceremony, the audience viewed graphic representations of the new facility design and were briefed on a variety of applications under development, such as automobile bumpers, body panels, stadium seats and others.

Prince Saud said that the project reflects the close cooperation between SABIC and various Saudi universities, including King Saud University. It is also part of SABIC’s 2020 strategy, which emphasizes the importance of scientific research to serve industries and the process of innovation, and for the creation of new industries.

Prince Saud added, “I take this opportunity to commend the efforts made by Prince Faisal bin Turki bin Abdulaziz Al Saud, Advisor to the Ministry of Petroleum and Mineral Resources, to get this project accomplished. I would also like to acknowledge the support received from Dr. Khalid bin Mohammed Al-Angari, Minister of Higher Education; Dr. Abdullah A.Al-Othman, Rector of King Saud University; and Azzam Shalabi, President of the National Industrial Clusters Development Program. My sincere gratitude to all of them. I also thank the working group of SABIC, the university, and all others who have worked hard and contributed to the achievement of this advanced stage of the project. I hope to meet you again soon when the project is fully accomplished.”

For his part, Mohamed Al-Mady said that this Center will support the continued expansion of SABIC’s new product portfolio, especially in the areas of packaging, automotive materials and compounding. He noted that the new research facility will support the growth of downstream industries. The Center will collaborate with customers in developing new plastic applications and provide technical support to SABIC’s local and international customers.

Al-Mady said that the Center will be equipped with more than 300 state-of-the-art items of special research equipment to be operated by more than 150 expert researchers. The Center will serve as a pilot project to help build Saudi Arabia’s knowledge economy and play an active role in the transfer of technology to the Kingdom by building relations between university scientists and end-manufacturers of the plastics industries.”

Also speaking on the occasion, Dr. Abdulrahman Al-Ubaid said that the Center will be part of SABIC’s Global Technology Center network and will work closely with other company-owned and operated centers in Pittsfield in the United States, Bergen op Zoom and Geleen in The Netherlands, Bangalore in India, Shanghai in China, Seoul in Korea and Moka in Japan. The Center will further enhance the relationships between SABIC, industrial investors and KSU.

The Center will also house the current Polymer Technical Support Center now located in Riyadh II Industrial City and will also act as a technical support hub and training center for SABIC’s customers worldwide.

This world-class Center is the largest of its kind in the Middle East. The design and engineering services for the project were performed by the local architecture firm, Zuhair Fayez, in partnership with the US-based firm KlingStubbins. The Center will be a LEED-certified building that complies with accepted benchmarks for the design and operation of high-performance green buildings (the LEED designation stands for Leadership in Energy and Environmental Design, a third-party certification program).

The Center’s design will also become a local landmark, standing almost 60 meters high to provide graphic representation of SABIC as one of the world’s leading petrochemical companies and the largest in the Middle East.

The design will also refer to SABIC’s four core values: "Inspire, Engage, Create and Deliver.” The Center is expected to be operational by the beginning of the third quarter of 2012.