GCC can be a ‘latter-day Venice,’ says former UK government adviser

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Updated 30 January 2023

GCC can be a ‘latter-day Venice,’ says former UK government adviser

  • European trade policy expert Paul McGrade explains why now is the time for a GCC-UK free trade agreement
  • Domestic politics rules out UK-US FTA while India wrestles with divisions over protectionism and politics, he asserts
  • McGrade says British public feel Brexit was a mistake, bringing costs and “very, very few benefits”

DUBAI: The GCC bloc, with its strategic location and fast-growing economies, can be a latter-day Venice, balancing between East and West, according to Paul McGrade, a former UK government adviser and an expert on UK and European trade policy, who was speaking as the GCC and the UK prepare to launch the third round of their free trade talks.

He predicts that the UK’s attempts to forge free-trade agreements with the US and India will meet with failure, in contrast with an FTA deal with the GCC, which could work despite the two sides’ policy differences over China and Russia.

He also asserts, citing opinion surveys, that the British public now feel that “Brexit was a mistake and has brought costs and very, very few benefits.”

McGrade made the comments during an appearance on “Frankly Speaking,” the Arab News current affairs talk show that dives deep into regional headlines by speaking with leading policymakers and business leaders.

He discussed what a GCC-UK trade deal would entail, whether an agreement could materialize before the end of this year and, given the political upheaval of the last 12 months, whether GCC leaders could really trust the British government’s trade promises.



“The GCC region will still have strong links with China. Energy needs there are huge and growing. (But I hope) the region will continue to have strong links with the West,” he said.

“There’s a difficult balancing act that’s going to get harder in the decades ahead. But the region is very strongly placed and, you (can) already see with the UK, and Europe more broadly, a stronger recognition that this is a strategic partnership, or a set of strategic partnerships, that they can’t afford to ignore.”

Last month, the UK government said it was committed to signing a significant trade deal with the GCC. However, given the political roller-coaster ride that the UK went on in 2022 and the fact that it is no longer the manufacturing giant of the last century, many wonder why GCC countries should still be interested and whether they can trust that the UK will deliver.

“It’s a fair question after six years really of instability in the UK, a country that always prided itself and partly sold itself on its political stability and its business-friendly regulation. It has been a bit of a roller-coaster, but I think that the high tide of Brexit disruption has passed,” McGrade said.



He said although the Tory government and the main opposition Labour Party claim they are committed to making Brexit work, what they really mean is sound public finances, a more stable regulatory relationship with Europe, a more predictable one where essentially the UK will broadly follow what the EU is doing in big areas like net-zero.

“This gives investors some confidence,” he told Katie Jensen, the host of “Frankly Speaking.”

“The UK is not going to be towing itself off into mid-Atlantic or the Pacific Ocean. It’s going to be geographically, obviously and in regulatory terms, very firmly anchored in the European neighborhood. That gives a bit of confidence and a bit of stability going forward. And the UK needs investment, which has dropped off sharply since the 2016 vote.”

Paul McGrade, a former UK government adviser and an expert on UK and European trade policy, on Frankly Speaking, hosted by Katie Jensen. (AN photo)

As the West decouples from China, experts say it will need strong relationships with the Gulf states. McGrade believes the war in Ukraine has refocused minds on the importance of the strategic partnership with the Gulf countries. “Not just through the trade deal, which could help in some areas, but it’s a broader picture,” he said.

“There’s a huge opportunity here for Gulf states and their investors to kind of reshape this relationship in the sectors that they might want to draw into their own economies in terms of building sustainable, high-skilled models for the future.”

The Conservative government in the post-Brexit era had promised that Britain would be able to make trade deals all over the world. However, they missed their targets last year. The UK has only signed trade agreements with about 60 percent of their global trade partners and talks with the US and India have stalled.

“Some of those (trade) talks have stalled, but some of them probably weren’t very realistic anyway,” McGrade said. “The domestic politics on both sides of the Atlantic probably ruled out the kind of deep trade deal with the US that some Brexiteers said they wanted.”

As for India, he said the country does not “really have a modern ambitious free trade deal with (any entity). It is an economy that is wrestling with its own internal divisions over degrees of protecting its domestic industry. And there are politics at play on things like visas.”

He continued: “It’s a different picture when you look at the Arab world and especially the GCC, because there’s a very strong historic relationship. There are obviously difficult issues in any trade deal about market access, but the relationship is probably more positive and the politics less difficult around the content of that trade deal.”



Elaborating on the potential for cross-border investments, McGrade said: “A lot of the UK’s economic sectors are in a weak position. (But) some of the fundamentals are pretty strong in areas like health tech, digital health. We have got Arab Health Week, of course, and creative industries, net-zero technology, the traditional strengths and areas like banking, other professional services.

“These are sectors that matter to Gulf economies and may matter increasingly, as we look to kind of building a sustainable net-, post-net-zero economy. So, there’s a lot on offer in the UK and probably some of it is underpriced because of the economic hit that the country has taken over the last few years. This probably is a very good time to invest, whether or not we have a trade deal quickly. But this trade deal potentially is an easier one to do than, say, US or India in political terms.”

The Gulf states are strong strategically but the relationship with the UK will need to be two-way, experts say, with British innovation holding the promise of helping the former to become high-skilled, high-tech economies.

McGrade, for one, is confident that as the UK seeks to diversify its trade and investment relationships, the Gulf states would be important in providing access to new markets, energy sources and other areas.

“(They are) going to be vital, (when) you see a Europe cutting itself off from traditional Russian supplies of oil and gas, and is also recalibrating the relationship with China,” he said. “The US talks openly about decoupling from Chinese supply chains. The UK talks a similar kind of language. The UK is probably a bit closer to the US than some of the big European powers on this.

Paul McGrade, a former UK government adviser and an expert on UK and European trade policy, on Frankly Speaking, hosted by Katie Jensen.

“If that’s the kind of world that we’re going to, then the Gulf states become more important than ever, not just for energy, but for the markets that they represent, the investment and the partnerships that they’re looking to build.”

“Look at the scale of the ambition in the Gulf, not just for sort of investment for return, but for the huge long-term sustainability project that (Gulf) governments, sovereign wealth funds and other investors are aiming for. There’s a huge opportunity for genuine partnerships where some of those innovative technologies that the UK still excels at could be a part of building up that sustainable skills base in Gulf economies.”

The UK estimates that an FTA with the GCC would add about £1.6 billion ($1.98 billion) to its economy. So, where does McGrade see the most gains for countries such as Saudi Arabia and the UAE?

“A trade deal is nice to have, but it’s not essential. These are already quite open economies in global terms. They already have strong trading relationships with the UK. A trade deal could help reduce some of the barriers, but it’s not the biggest game in town,” he said.

“The broader picture is looking at the sectors where UK innovation in particular can help achieve the long-term strategic aims of countries like Saudi Arabia and the UAE. If you look at some of the real strengths, in medical technology, health technology, digital health, we have a lot of innovation in the UK market, which is often underpinned by the fact that you have this almost unique data set because you have a huge national health service covering sort of 60 million people.”

McGrade believes the creative sector is another big source of the UK’s global strength, which can be important for areas like tourism and culture, in which some Gulf states have made a big investment. “There are areas like education that are traditional strengths and where there’s already a presence in the region from the UK,” he said.

“The professional services, banking and financial services is an obvious one. But we increasingly see legal and accounting services as well as sort of management consultancy establishing and growing their presences in the region.”

He next turned to what he called another big area, “which is the technology around net-zero, getting to net-zero, but helping make that sustainable and build economies that will be fast growing and rich, and high skilled beyond the dependence on hydrocarbons.”

Katie Jensen. (AN photo)

“There’s a lot there. Sovereign wealth funds in the region are already investing in some of these sectors. In some cases, what they’re looking for in a partnership is to bring some of those skills back home to the region so that they can be used to help build up the domestic high skills and high tech that will be needed (in the) longer term into the century to keep high-growing rich economies in the Gulf region.”

But what happens if the UK fails to sign a specific deal with the GCC as a whole? Does it then have the option to look at single individual trade deals with, say, the UAE, Saudi Arabia and Qatar?

McGrade says this has been happening in fact. “It’s been signing individual agreements across some sectors with some of the GCC members. That would continue,” he said.

“Whatever the governments do, those economic fundamentals ought to be attractive to Gulf investors, whether that’s at the state, kind of sovereign wealth fund level or kind of business level, because some of those strengths of the UK economy, innovation across several sectors, can really be part of the answer to what Gulf economies need to do and know they need to do to build sustainable, high-skilled, post-net-zero economies for the 21st century.”

As for the GCC countries’ less hawkish approach to Russia, McGrade does not see that as a hindrance to talks with the UK. “For two reasons,” he said. “There is a greater recognition of the strategic importance of the Gulf region, for the UK and for the West generally because of the war in Russia. Because of what that means for energy prices and long-term energy needs.

“The other point is that if the West is going to decouple from China, then it needs the Gulf. The Gulf states are well placed. They are in a strong position economically.”



To be sure, McGrade said, “the UK and Western governments generally always wrestle with some public opinion and campaigning groups at home on some of the values agenda. They always worry about if that can be squared off with the needs of the strategic relationship with the Gulf. That will continue to be an issue.”

Alluding to technical and political barriers to reaching a trade deal, he acknowledged that the two sides have different opinions on certain issues but said: “They are not showstoppers. The deal is doable. It’s probably more about political will in London. It would be a failure of political will if that deal isn’t done.”

McGrade was forthright about his opinions on British voters’ decision to leave the EU three years ago. “Pretty consistent polling over time suggests that an ever-growing number of the British public feel that Brexit was a mistake and has brought costs and very, very few benefits,” he said.



Nevertheless, he said, both the Conservative and Labour parties have concluded that they cannot revisit the trade deal in a fundamental way. “There is a review of the trade deal at the five-year point, which comes in 2025,” he said. “If Labour wins the election, they will want to improve the terms of the trade deal without changing its fundamental character.”

Quizzed about his personal opinion on Brexit’s costs — a weakened pound, higher inflation, trade and investment disruption, political uncertainty, loss of access to the EU single market — McGrade said it was clear that the downsides were huge and not just economic.

“The hit to Britain’s reputation for political stability, which is sort of the core of its soft power, has been in some ways even worse than the economic hit from loss of market access,” he said.



Pakistani, Russian officials negotiate deal to import crude oil from Russia

Updated 21 March 2023

Pakistani, Russian officials negotiate deal to import crude oil from Russia

  • Teams of Pakistan State Oil and Russia’s state-owned Operational Services Center met in Karachi on Tuesday
  • Petroleum minister said in January Pakistan wanted to import 35% of its total crude oil requirement from Russia 

KARACHI: Officials of the Pakistani and Russian state-owned oil companies on Tuesday held a meeting in Karachi to negotiate a deal under which Islamabad will acquire cheaper energy imports from Russia, an official with direct knowledge of the talks said.   

Russia this year conceptually agreed to supply crude oil and oil products to cash-strapped Pakistan at cheaper rates and signed several memoranda of understanding with Pakistan’s energy ministry.  

After the inter-governmental meeting in January, Pakistan’s state minister for petroleum Musadik Malik said his country wanted to import 35 percent of its total crude oil requirement from Russia. 

“Talks to negotiate government-to-government level deal were held in Karachi today,” the official, who is privy to details of the talks, confirmed to Arab News, adding that parlays were still underway and a deal may be signed “soon.” 

He added that the details would be shared after the deal was sealed. 

In the talks, officials of the Pakistan State Oil (PSO) are representing the country, while the Russian side is being represented by a team of Operational Services Center, a Russian state-owned company. 

Malik didn’t respond to Arab News' request for a comment on the matter. 

The current price of Brent crude has come down to $73 per barrel whereas the Russian crude oil price remained at $52 in February, which has further lowered between $42-48 in the international market, according to Pakistani media reports. 

“They [oil industry] urged Pakistan refineries to purchase Russian oil on their own in compliance with the G7 countries’ regulations,” Pakistan's Geo News channel reported. 

"However, the government is trying to secure a G2G (government-to-government) deal below the $60/barrel price cap imposed by G7 countries." 

Under the G2G deal, Pakistan's Petroleum Division wants to lock the deal at close to $50/barrel, according to the report. The G7 countries imposed the price cap on Russian oil in the wake of Moscow's invasion of Ukraine. 

Malik recently said that Pakistan would receive its first consignment of crude oil from Russia in the first week of April.

“The first consignment of crude oil from Russia will arrive in the first week of April,” the state-run Radio Pakistan broadcaster reported on March 17, citing the state minister.    

Pakistani officials last year visited Russia to negotiate the oil deal at a discounted rate. Islamabad and Moscow then agreed that the oil and gas trade transaction would be structured to ensure mutual economic benefit. 

In October last year, Russia's consul general in Karachi, Andrey Viktorovich Fedorov, said that sanctions imposed by Western countries on Moscow had impacted economic cooperation between Pakistan and Russia. The sanctions came in response to Russia’s invasion of Ukraine in February last year. 

Former prime minister Imran Khan, who arrived in Russia the day it launched a full-scale invasion, has previously said that Russia was willing to offer oil at cheaper rates to Pakistan. 

Miftah Ismail, who has now been replaced by Ishaq Dar as the finance minister, had rubbished Khan’s claims, saying Islamabad would be willing to buy oil at cheaper rates from Russia provided Moscow made the offer and Islamabad would not have to face sanctions on the deal. 

Pakistan denies IMF linked bailout loan deal to nuclear program

Updated 20 March 2023

Pakistan denies IMF linked bailout loan deal to nuclear program

  • Finance minister says delay in reaching staff level agreement with IMF “purely due to technical reasons”
  • Dar says last week’s comments about Pakistan’s nuclear program should not be linked to ongoing IMF negotiations

KARACHI: Pakistani Finance Minister Ishaq Dar said on Monday neither the International Monetary Fund (IMF), nor any foreign country, had raised issues related to the country’s nuclear program, and a delay in signing a bailout deal with the IMF was due to "technical reasons."

Dar was addressing his own remarks from last week in the upper house of parliament when he said no country or institution had a right to tell Pakistan” what range of missiles or what nuclear weapons it can have, we have to have our own deterrence.”

The remarks were widely linked to a months-long delay in signing a staff level agreement with the International Monetary Fund for a bailout package of $1.1 billion, that has been delayed since November mainly over issues related to fiscal policy adjustments.

In a statement issued by the ministry of finance on Monday evening, Dar said his comments on Pakistan’s nuclear program were being “quoted out of context.”

“My comments with regards to Pakistan’s Nuclear Program was in response to a colleague Senator’s specific question, wherein, I emphasized that Pakistan has sovereign right to develop its nuclear program, as it best suits our national interests, without any external dictation, which, by no means should in any way whatsoever be linked with the ongoing negotiations with the IMF,” the finance minister said.
“It is clarified that neither IMF nor any other country has attached any conditionality or made any demand from Pakistan with regard to our nuclear capability … The delay in IMF staff level agreement is purely due to technical reasons, for which we are continuously engaged with the IMF in order to conclude it at the earliest.”

On Sunday, the IMF country representative also denied any link with past or current IMF supported programs and decisions by any Pakistani government over its nuclear program.

Last week, Dar said an assurance from "friendly countries" to fund a balance of payment gap was the last hurdle in securing the IMF deal, which will offer a critical lifeline to avert an economic meltdown.

The latest tranche of funds are part of a $6.5 billion bailout package the IMF approved in 2019.

The latest deal will also unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves, which have fallen to four weeks worth of import cover.

The IMF wants Pakistan to get the assurance for up to $7 billion to fund this fiscal year's balance of payments gap. Dar has been saying it should be around $5 billion.

New York Community Bank to buy failed Signature Bank

Updated 20 March 2023

New York Community Bank to buy failed Signature Bank

  • The 40 branches of Signature Bank will become Flagstar Bank. Flagstar is one of New York Community Bank’s subsidiaries
  • Signature Bank was the second bank to fail in this banking crisis, roughly 48 hours after the collapse of Silicon Valley Bank

NEW YORK: New York Community Bank has agreed to buy a significant chunk of the failed Signature Bank in a $2.7 billion deal, the Federal Deposit Insurance Corp. said late Sunday.
The 40 branches of Signature Bank will become Flagstar Bank, starting Monday. Flagstar is one of New York Community Bank’s subsidiaries. The deal will include the purchase of $38.4 billion in Signature Bank’s assets, a little more than a third of Signature’s total when the bank failed a week ago.
The FDIC said $60 billion in Signature Bank’s loans will remain in receivership and are expected to be sold off in time.
Signature Bank was the second bank to fail in this banking crisis, roughly 48 hours after the collapse of Silicon Valley Bank. Signature, based in New York, was a large commercial lender in the tristate area, but had in recent years gotten into cryptocurrencies as a potential growth business.
After Silicon Valley Bank failed, depositors became nervous about Signature Bank’s health due to its high amount of uninsured deposits as well as its exposure to crypto and other tech-focused lending. By the time it was closed by regulators, Signature was the third largest bank failure in US history.
The FDIC says it expects Signature Bank’s failure to cost the deposit insurance fund $2.5 billion, but that figure may change as the regulator sells off assets. The deposit insurance fund is paid for by assessments on banks and taxpayers do not bear the direct cost when a bank fails.

Munjz takes pivotal step in its business model, secures $5 million in funding 

Updated 19 March 2023

Munjz takes pivotal step in its business model, secures $5 million in funding 

  • Company provides property management system for community managers

CAIRO: Saudi Arabia’s Munjz joins the property technology sector after taking a pivot that has changed the company’s mission and opened doors to new opportunities. 

Established in 2017, Munjz first started as a platform for homeowners to connect with certified home service providers but, by the end of 2021, the company took a pivotal step after the founder recognized that the property management sector holds a large opportunity as it is worth over $1.8 trillion globally. 

In an exclusive interview with Arab News, Abdullah AlDaij, CEO and founder of Munjz, said, “We pivoted our business model to be in the business-to-business sector and to classify our company as a proptech company seeing that around $25 billion were invested in the global proptech industry, which is around 27 percent from the global funding in 2021. Our vision is to digitalize vertical industry businesses by providing software and services at the same time.”

Capitalizing on the new trend, he decided to create a property management system software while incorporating the home services platform to bring the best of both worlds. 

The company provides a property management system for community managers to run everything from financial to operational functions through the software. In addition, managers also have access to the marketplace of service providers like house cleaning, maintenance and material supply, which can be utilized to better operate the business. 

Residents also have access to the home services marketplace that is white labeled under Munjz to also cater to its direct-to-consumer segment. 


$1.8 trillion

Munjz took a pivotal step after the founder recognized that the property management sector holds a large opportunity as it is worth over $1.8 trillion globally.

“We have three different customer segmentations,” AlDaij explained, “in residential, I’m talking about compounds, real estate, developers, community association, hospitality, and property managers.” 

“The second segment is commercial where we are targeting retailers, offices, food and beverage, warehouses, healthcare centers and education centers. The third segment is the service companies that are in our marketplace, we are talking about professional services, cleaning services, hospitality services and logistics,” he added. 

Through its new customer segmentation pivot, Munjz managed to open room for more revenue streams to support the business. 

Abdullah AlDaij, Munjz chief executive officer. (Supplied)

“We have three main revenue streams,” he explained. “The first is from the marketplace, from our service providers. We are capturing a commission base from every service closed.” 
“The second revenue stream is the subscription fee to access the platform and the third revenue stream is from the end user who is requesting a service from the property manager,” he continued, explaining that the third revenue stream is the company’s white label services that are provided to property managers to cover residential orders. 

As the company pivoted to its new model just seven months ago, AlDaij predicts to hit profitability in 18 to 24 months through expansion plans into the aforementioned segments. 

“We operate in 15 cities in the Kingdom. By the first quarter of next year, we will expand to Egypt and Abu Dhabi. Our shift is going to be more convenient for us for global expansion because now we are focusing on our software as a service solution,” AlDaij stated. 

He added that the company will only focus on the PMS software in its expansion plans because of its convenience.  

“Inside the Kingdom, we are strong enough in terms of the marketplace because we have already built this network for the last five years. So, we have more than 3,500 service providers that are working with us, and all these companies are now available to our B2B clients,” he stated. 

As the company expands, AlDaij stated that Munjz will go through a shortlisting process for its service providers to offer better experiences to its clients. 

The company currently has 79 business accounts that include “Dunkin Donuts, McDonald’s, DHL and one of the biggest development companies in Saudi Arabia called Almajdiah, which has more than 20,000 units under its umbrella,” AlDaij added. 

Moreover, he stated that the company is expected to reach 300 business clients by the end of this year. 

Last month, Munjz raised $5 million in a series A funding round led by undisclosed investors with participation from Vision Ventures, Almajdiah Investment Co. and Watheeq Proptech Fund. 

AlDaij shared that the company will utilize its funding in product development and technology as well as structuring Munjz. 

“Because our customers are different it means the company is different. Therefore, the structure and the team members should be taken into consideration to look after the talent who can run this new strategy. The investment is going to be mainly in structuring the team members and looking after the talents and engineers,” he stated. 

Munjz currently has 50 employees and will reach 85 staff members by the end of this year. 

AlDaij concluded by stating that the Saudi property management sector will grow significantly in the coming years, as it was worth $23 billion in 2021 and is projected to reach $35 billion by 2028. 

Riyadh Cables expects to maintain double-digit profit driven by giga projects

Updated 19 March 2023

Riyadh Cables expects to maintain double-digit profit driven by giga projects

  • Firm recorded impressive net profit of SR351.9 million for 2022, an increase of 46.6 percent over the previous year

RIYADH: In its first-ever public result after being listed on the Saudi Stock Exchange, Riyadh Cables Group Co. announced an impressive net profit of SR351.9 million ($93.84 million) for 2022, registering an increase of 46.6 percent over the previous year. 

The Riyadh-based firm recorded revenue growth of 40.3 percent to SR6.9 billion during the same period, while its sales volumes increased by 37.1 percent to 190 kilo tons.  

The robust performance prompted RCG’s board to propose dividends of SR225 million at SR 1.50 per share for the financial year 2022, in line with its previous guidance and subject to shareholders’ approval at the Annual General Meeting.  

In an exclusive interview with Arab News, the company’s CEO Borjan Sehovac, said: “Strong local and regional demand drove an increase in sales volumes, resulting in a boost to sales growth. Profitability was enhanced by successful SG&A (selling, general and administrative expenses) optimization measures and overall cost management.”  

Riyadh Cables Group Co. CEO Borjan Sehovac. (Supplied)

He went on to add that RCG’s ability to win a larger share of bids locally and regionally was due to its “stellar reputation which we built along the decades.”  

With strong activity expected to be sustained in RCG’s core Middle East markets, he said they anticipate substantial demand-led growth in revenue in 2023, remaining healthy in the range of 3 percent to 5 percent, “while capex of SR200-plus million is expected to support the strong order backlog.”  

The company expects its net profit to increase by a double-digit figure in the financial year 2023. 

Tadawul listing 

Founded in 1984, RCG got listed on Tadawul on Dec. 19, 2022, after successfully raising $378 million from an initial public offering.  

After a long and strong track record, in which the company has achieved a leadership position in its sector, Sehovac said the IPO was a “natural next step on our growth journey – increasing our profile, strengthening our institutionalization drive and positioning us for future expansion.”  

Sehovac calls 2022 a “historic year” for their business, not least for the successful debut of RCG on the Saudi Exchange, but for reporting significant growth in both sales volumes and revenues for the full-year 2022.

“The company’s strong sales, coupled with an unwavering focus on operational excellence and efficiency, have not only resulted in impressive profitability but also ensured sustainable long-term growth,” said the CEO.  

RCG is among the 18 companies or funds that offered parts of their shares through IPOs during last year as the Saudi Stock Exchange continues to drive market growth in the region.  

At the end of 2022, Tadawul had a total of 223 listed companies, with the total offered value reaching SR37.51 billion as 2.96 billion shares/units were offered for all IPOs.  

Sehovac said the Saudi capital market is the region’s largest, most liquid and most attractive market. 
“Backed by the ambitions of Saudi Vision 2030, the underlying evolution of the Kingdom is, and will always be reflected in its financial markets,” he said, adding that they are proud to be active participants in it. 

The Riyadh-based firm recorded revenue growth of 40.3 percent to sR6.9 billion in 2022, while its sales volumes increased by 37.1 percent to 190 kilo tons. (Supplied)

Growth prospects   

RCG, which serves customers in Saudi Arabia, the Gulf Cooperation Council and international markets, is bullish about the growth prospects of the cables industry.  

“All global trends and indicators confirm that the power cables market is expected to grow globally based on the ambitious development plans and major demand drivers, such as energy transition and digital transformation,” said RCG CEO.  

On a local level, he said the power cables market in the Kingdom is expected to grow at a compound annual growth rate of 8.3 percent between 2022 and 2027 to reach SR16.8 to SR18.7 billion, driven by giga/mega projects as well as industrial and housing development.  

“RCG, being the largest player in the region, is ideally positioned to benefit from this growth,” he affirmed. 

Expansion strategy 

The company owns and operates 15 cable and related materials manufacturing and testing facilities, extending over 1.5 million sq. m in Riyadh, Sharjah and Baghdad. Its manufacturing infrastructure is integrated across the value chain including six factories to manufacture raw materials used in the cables industry to support its own nine cables factories. 

“This makes us self-reliant while also improving our manufacturing efficiency by being able to control the cost and quality of our manufacturing materials,” Sehovac said.

Asked about its expansion plan, he replied the company will expand its footprint in due course, and “we’ll make announcements to the market at the appropriate time.” 

RCG has a vast regional distribution network and a production capacity of 264,000 tons per year. 

Sehovac said the company is continuously looking to increase its market share by focusing on increasing sales of its primary products in existing markets and expanding to neighboring markets.  

He clarified that the company doesn’t have any immediate plans to raise funding as “we are a well-funded business with a strong balance sheet and plenty of headroom to grow.”   

With regard to the supply chain — as the raw materials are mostly imported —how does the company ensure smooth supply amid the volatile pricing of metal and aluminum?   Sehovac insists that the company always strives to increase the percentage of local content in its manufacturing process. 

“In fact, RCG sources its needs of aluminum, lead, and polymers locally. The company buys its core manufacturing materials through long-term contracts,” he revealed, adding that they also use a well-engineered hedging mechanism to offset commodity price volatility risk and stability of profits. 

ESG goals 

Divulging about the company’s environmental, social and governance strategy, Sehovac said the company owns state-of-the-art recycling facilities for the reuse of recyclable metals, polymers and cable drums, contributing effectively to the sustainability processes.  

“ESG is at the heart of RCG’s strategy. We are committed to reducing waste and CO2 emissions,” he said, adding that they are amongst key suppliers of renewable energy projects, supporting the Kingdom’s plans for generating 58.7 gigawatts of renewable energy with locally manufactured products. 

The CEO called Vision 2030 as “a roadmap for its investment plans, and to be a key player in delivering the vision’s objectives.” 

“This is a fantastic opportunity for our business and one that we are fully capitalizing on,” he concluded.