ZURICH: ABB is confident of winning a slice of the $500 billion mega-city project in Saudi Arabia, as the Swiss engineering group on Thursday posted its strongest growth in new orders for more than two and-a-half years.
CEO Ulrich Spiesshofer returned from meeting members of the Saudi royal family to present ABB’s third-quarter earnings, which came in slightly ahead of analysts’ forecasts.
During his trip, Spiesshofer discussed Saudi Arabia’s plan to create a business and industrial zone, named Neom, extending across its borders into Jordan and Egypt, the biggest project yet in a series of efforts to free the Kingdom of its dependence on oil exports.
ABB, with three factories and a long history in Saudi Arabia, is well positioned to provide automation and power to high-tech industries setting up in the country, Spiesshofer told reporters, declining to quantify the value of projects ABB could bid for.
“There’s a wide range of opportunities and we will do our best to participate in that in the appropriate way,” Spiesshofer said.
He was speaking after ABB reported results slightly ahead of expectations and brightened its outlook for the global economy.
The power transmission and automation company said net profit rose 1 percent to $571 million, beating analyst estimates of $553 million in a Reuters poll.
Sales rose 6 percent to $8.72 billion, beating estimates of $8.52 billion, while new orders — a signal of future growth — were up 8 percent, in line with expectations at $8.16 billion and the fastest growth rate since the first quarter of 2015.
Analysts from Morgan Stanley described the results as encouraging, although Barclays said investors may have been hoping for more in light of the easy comparisons with last year when orders dropped 14 percent.
ABB’s stock reacted positively to the earnings update, gaining 3 percent in early trade, and was one of the top performing stocks on the Euro Stoxx industrial goods and services index. The stock is trading at its highest level since September 2008.
Spiesshofer acknowledged the easier comparison base, but said ABB was gaining momentum with small orders worth under $15 million rising in all regions and in all business areas.
“That means the ship of ABB is really going into a growth mode altogether,” Spiesshofer said. “Our many initiatives are paying off.”
The improvements showed the strategy of focusing on higher-growth areas such as digital technology, robotics and food and beverage markets, was working, he added.
“Going into 2018 with the slightly more favorable market development that we are witnessing,” he said, “I am confident that our ambition to accelerate growth momentum will pay off.”
ABB aims to win Saudi projects in order surge
ABB aims to win Saudi projects in order surge
Arab food and beverage sector draws $22bn in foreign investment over 2 decades: Dhaman
JEDDAH: Foreign investors committed about $22 billion to the Arab region’s food and beverage sector over the past two decades, backing 516 projects that generated roughly 93,000 jobs, according to a new sectoral report.
In its third food and beverage industry study for 2025, the Arab Investment and Export Credit Guarantee Corp., known as Dhaman, said the bulk of investment flowed to a handful of markets. Egypt, Saudi Arabia, the UAE, Morocco and Qatar attracted 421 projects — about 82 percent of the total — with capital expenditure exceeding $17 billion, or nearly four-fifths of overall investment.
Projects in those five countries accounted for around 71,000 jobs, representing 76 percent of total employment created by foreign direct investment in the sector over the 2003–2024 period, the report said, according to figures carried by the Kuwait News Agency.
“The US has been the region's top food and beverage investor over the past 22 years with 74 projects or 14 projects of the total, and Capex of approximately $4 billion or 18 percent of the total, creating more than 14,000 jobs,” KUNA reported.
Investment was also concentrated among a small group of multinational players. The sector’s top 10 foreign investors accounted for roughly 15 percent of projects, 32 percent of capital expenditure and 29 percent of newly created jobs.
Swiss food group Nestlé led in project count with 14 initiatives, while Ukrainian agribusiness firm NIBULON topped capital spending and job creation, investing $2 billion and generating around 6,000 jobs.
At the inter-Arab investment level, the report noted that 12 Arab countries invested in 108 projects, accounting for about 21 percent of total FDI projects in the sector over the past 22 years. These initiatives, carried out by 65 companies, involved $6.5 billion in capital expenditure, representing 30 percent of total FDI, and generated nearly 28,000 jobs.
The UAE led inter-Arab investments, accounting for 45 percent of total projects and 58 percent of total capital expenditure, the report added, according to KUNA.
The report also noted that the UAE, Saudi Arabia, Egypt, and Qatar topped the Arab ranking as the most attractive countries for investment in the sector in 2024, followed by Oman, Bahrain, Algeria, Morocco, and Kuwait.
Looking ahead, Dhaman expects consumer demand to continue rising. Food and non-alcoholic beverage sales across 16 Arab countries are projected to increase 8.6 percent to more than $430 billion by the end of 2025, equivalent to 4.2 percent of global sales, before exceeding $560 billion by 2029.
Sales are expected to remain highly concentrated geographically, with Egypt, Saudi Arabia, Algeria, the UAE and Iraq accounting for about 77 percent of the regional total. By product category, meat and poultry are forecast to lead with sales of about $106 billion, followed by cereals, pasta and baked goods at roughly $63 billion.
Average annual per capita spending on food and non-alcoholic beverages in the region is projected to rise 7.2 percent to more than $1,845 by the end of 2025, approaching the global average, and to reach about $2,255 by 2029. Household spending on these products is expected to represent 25.8 percent of total expenditure in 13 Arab countries, above the global average of 24.2 percent.
Arab external trade in food and beverages grew more than 15 percent in 2024 to $195 billion, with exports rising 18 percent to $56 billion and imports increasing 14 percent to $139 billion. Brazil was the largest foreign supplier to the region, exporting $16.5 billion worth of products, while Saudi Arabia ranked as the top Arab exporter at $6.6 billion.
