Saudi Arabia’s expat fee waiver fuels industrial growth, boosting GDP by 14.7%

The number of industrial establishments grew from 7,625 in 2019 to 11,868 in 2024, a growth rate of 55.6 percent. AFP/File
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Updated 19 September 2024
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Saudi Arabia’s expat fee waiver fuels industrial growth, boosting GDP by 14.7%

JEDDAH: Saudi Arabia’s decision to waive fees for expatriate workers in the industrial sector has significantly contributed to a robust 14.7 percent increase in gross domestic product, soaring from SR392 billion ($104.5 billion) in 2019 to SR592 billion in 2023.

According to a report by the Economic Studies Center at the Federation of Saudi Chambers, this policy has not only spurred GDP growth but also enhanced non-oil exports, which have climbed to approximately SR208 billion, marking a 12 percent increase since 2019.

Effective until Dec. 31, this initiative is part of the Kingdom’s broader strategy to stimulate growth and attract investment in its industrial sector. The report also notes that the opening of new markets and the signing of various trade agreements have played crucial roles in this upward trend, with the local content value in non-oil sectors reaching SR1.14 trillion by the end of 2023.

Over 8,000 industrial firms have benefited from the waiver, which eliminated around SR5 billion in expatriate labor fees. The analysis highlights that this policy has encouraged industrial establishments to adopt innovative business models, localize advanced technologies, and attract skilled professionals, ultimately increasing the availability of products to meet local demand.

The number of products bearing the Saudi quality mark has also seen a rise, reflecting enhanced product quality. A comprehensive analysis conducted by the Saudi Press Agency evaluates the decision’s impact based on seven economic indicators, including GDP contribution, the growth of industrial establishments, and investment volumes.

Key findings indicate that the industrial sector’s GDP surged from SR392 billion in 2019 to SR592 billion in 2023, with a 14.7 percent contribution rate. The number of industrial establishments grew from 7,625 in 2019 to 11,868 in 2024, a growth rate of 55.6 percent, while investments in the sector increased by 54 percent, reaching SR1.5 trillion compared to SR992 billion.

Moreover, the report reveals a substantial rise in foreign investments due to government support measures, such as covering financial fees and implementing the local content system. The number of foreign factories jumped from 622 to 1,067, reflecting a 71.5 percent growth rate, while invested capital soared from SR43 billion to SR93 billion, marking a staggering 116.2 percent increase.

In terms of employment, the industrial sector employed around 1.2 million workers by the end of the first quarter of 2024, with 358,000 being Saudi nationals, resulting in a 28 percent Saudization rate. Workers in this sector accounted for 12.9 percent of all nationals employed in the private sector.

The report underscores that various government incentives have encouraged the private sector to increase Saudization, creating more job opportunities for citizens. The industrial sector emerged as the largest contributor to job creation for Saudis between Jan. 1, 2023, and March 31, witnessing a 59 percent increase with over 82,000 new jobs added.


Closing bell: Saudi main index rises to 12,002; trading turnover at $1.96bn

Updated 15 October 2024
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Closing bell: Saudi main index rises to 12,002; trading turnover at $1.96bn

  • Parallel market Nomu gained 474.42 points to close at 25,919.34
  • MSCI Tadawul Index increased by 6.87 points to 1,503.56

RIYADH: Saudi Arabia’s Tadawul All Share Index rebounded on Tuesday, as it gained 41.96 points, or 0.35 percent, to close at 12,001.63. 

The total trading turnover of the benchmark index was SR7.34 billion ($1.96 billion), with 144 of the listed stocks advancing and 81 declining. 

The Kingdom’s parallel market Nomu gained 474.42 points to close at 25,919.34, while the MSCI Tadawul Index also increased by 6.87 points to 1,503.56.

The best-performing stock on the main market was CHUBB Arabia Cooperative Insurance Co. The firm’s share price surged by 8.17 percent to SR45.

Other top performers were Saudi Public Transport Co. and Fawaz Abdulaziz Alhokair Co., whose share prices soared by 6.06 percent and 5.74 percent to SR23.12 and SR13.64, respectively.

The worst performer on the main index was Al-Baha Investment and Development Co. as the firm’s share price slipped by 8.57 percent to SR0.32. 

On the announcements front, Al Rashid Industrial Co. said it completed the purchase deal worth SR9.2 million for the facility site of the International Factory for Jewel Boxes in Qassim 1st. Industrial City. 

According to a Tadawul statement, the entire purchase was self-financed and said that the deal was part of the company’s expansion plans to increase production capacity and market share in the packaging industry, both locally and internationally. 

The company added that the financial impact of the deal is expected to be visible in 2025. 

Al Rashid Industrial Co.’s share price climbed 2.40 percent on Tuesday to SR42.70. 

Almuneef Co. for Trade, Industry, Agriculture, and Contracting announced that it signed a contract valued at SR3.75 million with National Agricultural Development Co. to purchase 1,500 tons of first-generation certified wheat seeds for 2024. 

The firm said that the financial impact of the four-month contract will be visible in the company’s fiscal performance in the fourth quarter of this year. 

The share price of Almuneef Co. for Trade, Industry, Agriculture, and Contracting edged up by 0.78 percent to SR51.90. 


SVC invests $15m in Vision Ventures to fuel startups 

Updated 15 October 2024
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SVC invests $15m in Vision Ventures to fuel startups 

RIYADH: Startups in the Kingdom are set to benefit after Saudi Venture Capital Co. committed $15 million to Saqr 2 Fund, which targets early-stage investments across the region. 

The $90 million fund, managed by Saudi-based Vision Ventures, targets businesses from pre-seed to pre-series B stages, spanning various sectors in the Kingdom and the broader Middle East and North Africa region, according to the Saudi Press Agency. 

Nabeel Koshak, CEO and board member of SVC, said: “The investment in Vision Ventures’ venture capital fund is part of our fund investment program.”  

He added: “It aligns with our strategy to stimulate the establishment of funds that invest in Saudi startups and small and medium-sized enterprises at various growth stages. Additionally, we aim to encourage these funds to provide added value to the startups and SMEs.” 

Vision Ventures, a key player in the venture capital ecosystem, expressed confidence in the collaboration.  

“SVC’s continued commitment to our venture capital funds is a privilege for us,” said Kais Al-Essa, co-founder and CEO of Vision Ventures, adding: “We are proud to have SVC as a key investor in our funds once again, reaffirming the company’s ability to provide investors with exceptional performance and returns, attracting investors alongside other leading institutional investors like SVC.” 

This investment is part of SVC’s broader initiative to stimulate venture capital activity in Saudi Arabia and foster the growth of startups and SMEs in the region.


Deals worth $28bn across various sectors expected at FII8, says Attias

Updated 15 October 2024
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Deals worth $28bn across various sectors expected at FII8, says Attias

RIYADH: Deals worth $28 billion are expected to be announced at this year’s Future Investment Initiative, said FII Institute CEO Richard Attias.

He spoke at a pre-event press conference on Tuesday to announce details about the eighth edition of the event scheduled to be held on Oct. 29-31 in the Saudi capital.

Attias noted that the event will bring together entrepreneurs and startups from around the world, serving as a bridge of communication among them.

Regarding the potential deals, he mentioned that the number of partnerships expected to be announced at FII8 is growing, stating, “we are still finalizing several agreements.”

He emphasized that the summit will be more than just a gathering of thought leaders, focusing on driving tangible outcomes across key sectors. “This year, we expect record-breaking announcements across  sectors including renewable energy, cybersecurity, food security, and entertainment,” he said.

The summit is committed to fostering positive change through effective solutions across various domains, including global connectivity, mining, AI, health-tech, sports, the circular economy, food, economies of the future, art, culture, and other key areas.

Highlighting the success of the previous event, Attias noted that, despite the current global and regional situation, 7,100 participants from around the world are registered for the upcoming event. “It is 1,000 more than last year,” he said.

“We are trying to be doers, not just talkers. At FII, we bring real investments, with over $128 billion worth of deals sealed across past editions. If you divide that by seven, it’s much more than $10 billion (worth) of deals which happen during FII,” Attias added.

The CEO explained that one of the core pillars of the FII Institute is “Act,” a division that focuses on investing in startups that align with the institute’s mission of driving impactful and innovative solutions for humanity. “We have already invested in seven portfolio companies,” he said.

Attias emphasized that the FII Institute believes in game changers and helps innovative investors bring about positive change in the world. He pointed out that FII’s influence extends beyond investment, releasing indexes such as the FII Priority Compass, which helps shape global conversations by identifying and tracking key priorities for industries and economies.

During the conference, Attias highlighted the importance of showcasing the positive impact of investments made through the FII Institute.

He stated that investment is not just a financial transaction but has broader effects, particularly in areas like job creation and ecosystem development. The CEO emphasized that the FII Institute has become a membership-based movement, attracting individuals and organizations committed to creating an impact.


Saudi Arabia, Italy enhance mining ties through investment talks

Updated 15 October 2024
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Saudi Arabia, Italy enhance mining ties through investment talks

  • Official trip aims to bolster industrial and mining cooperation and explore joint opportunities aligned with the Kingdom’s National Industrial Strategy

JEDDAH: Saudi-Italian mining relations are set to strengthen following meetings between senior officials in Rome focused on sustainable solutions, clean energy, and attracting investment to the Kingdom’s expanding exploration sector. 

Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef commenced his three-day visit on Oct. 14, meeting with Italy’s Minister of Environment and Energy Security Gilberto Pichetto Fratin. 

The meeting, attended by Prince Faisal bin Sattam bin Abdulaziz, Saudi ambassador to Italy, and Saleh Al-Sulami, CEO of the National Industrial Development Center, emphasized the importance of collaborative development and the strategic partnership between the two nations across various sectors, the Saudi Press Agency reported. 

The official trip aims to bolster industrial and mining cooperation and explore joint opportunities aligned with the Kingdom’s National Industrial Strategy. 

This comes on the back of Saudi Arabia’s increasing non-oil exports to Italy, which reached SR2.8 billion ($747 million) in 2023, while total non-oil imports from Italy amounted to SR21.8 billion. 

In a post on his X account, Alkhorayef said: “At the beginning of my visit to Italy, I met the minister of environment and energy security, and we talked about the important partnership between Saudi Arabia and Italy in various sectors.” 

He underscored the “mutual desire” to strengthen collaboration for the benefit of both countries. 

During the talks, Alkhorayef outlined the promising prospects within the Kingdom’s mining sector, detailing all stages from exploration to processing. He highlighted Saudi Arabia’s untapped mineral resources, estimated at approximately $2.5 trillion, and emphasized the availability of 80 years’ worth of geological data to support informed investment decisions. 

The minister also explored opportunities to enhance collaboration, share expertise, and attract joint investments in renewable energy, stressing the need for improved supply chain integration to meet local, regional, and global demands. He encouraged Italian companies to expand their operations in the Kingdom, urging the private sector to leverage significant developmental projects. 

Alkhorayef extended an invitation to Fratin to attend the International Mining Conference in Riyadh in early 2025, anticipating substantial participation from Italy given its crucial role in the global mining sector. 

The Italian Ministry of Environment and Energy Security expressed its commitment to supporting the transition to a low-carbon economy while promoting sustainable mineral resource management, SPA reported. 

On the same day, Alkhorayef engaged in bilateral meetings with major Italian and global companies, focusing on localizing electric vehicle manufacturing opportunities, enhancing cooperation in the aviation and shipbuilding sectors, and exploring smart manufacturing solutions. 

Discussions highlighted the unique opportunities presented by 12 strategic sectors central to the National Industrial Strategy and incentives designed to attract global investors, facilitating value creation for the national economy. 

In his meeting with the founder and CEO of Swiss electric vehicle manufacturer Piech, Alkhorayef discussed the potential for transferring advanced automotive manufacturing technologies to the Kingdom. 

He emphasized the country’s commitment to nationalizing this industry, referencing the Lucid project, which aims to produce 155,000 electric vehicles annually by 2027, and the Ceer company, targeting 170,000 vehicles by 2034. 

The minister outlined Arabian Tiger Holding Co.’s plans to localize aviation manufacturing technologies in the Kingdom during discussions with its CEO, focusing on establishing a facility for aircraft component production after acquiring Piaggio Aerospace, a leader in commercial and drone aircraft. 

Alkhorayef also met with officials from Fincantieri, an Italian shipbuilding firm, to explore collaboration in the maritime industry, addressing all stages of the value chain from design to delivery. 

In a meeting with the international market director at AlmavivA, he discussed the latest automation solutions for industrial facilities aimed at enhancing productivity and promoting smart manufacturing cooperation between the Kingdom and Italy, with a particular focus on integrating robotics into manufacturing processes. 

Alkhorayef also engaged in talks with Yousef Al-Mimni, vice chairman of the Saudi-Italian Business Council, commending the Council’s role in strengthening trade and economic ties between the Kingdom and Italy. 

He encouraged Italian private sector companies to invest in promising sectors in Saudi Arabia, particularly in industrial and mining. 


Saudi-South African Business Forum sees $25m credit agreement signed to help exporters 

Updated 15 October 2024
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Saudi-South African Business Forum sees $25m credit agreement signed to help exporters 

RIYADH: A $25 million credit agreement involving the Saudi Export-Import Bank and a major South African financial institution was among the deals struck at a special business forum in Johannesburg.  

The arrangement with Standard Bank Group will see companies in the Kingdom given extra funding support to trade with the African country.  

The deal was signed during the Saudi-South African Business Forum, which saw 420 business leaders and officials discuss how to boost economic ties between the nations – with an emphasis on the mining sector, the Saudi Press Agency reported.   

Bloomberg cited Naif Al-Shammari, Saudi EXIM’s deputy CEO, as saying that the agreement with Standard Bank Group will bolster trade links between the two countries.  

Another memorandum of cooperation was signed between the Saudi Export Development Authority and Skytower Development Co.  

Commerce between Saudi Arabia and South Africa was estimated at about $3.5 billion in 2023. The Kingdom also ranks first among South Africa’s trading partners in the region.   

The high-level Saudi delegation attending the forum was led by the Minister of Commerce and Chairman of the National Competitiveness Center, Majid bin Abdullah Al-Qasabi, and was organized by the NCC in collaboration with the Federation of Saudi Chambers and the South African Ministry of Trade and Industry, according to SPA.  

One panel at the event addressed cooperation in the mining sector, while the another discussed expanding the economic partnership between the Kingdom and South Africa in light of promising opportunities.   

It also introduced the mechanisms used by relevant authorities to resolve challenges facing the business sector.   

The forum also falls in line with the Kingdom’s commitment to strengthening its trade and economic relations with the African continent, which was announced by the Crown Prince and Prime Minister of Saudi Arabia at the Saudi-African Summit held in Riyadh last November.

The gathering included a presentation on the key reforms implemented to enhance the Kingdom’s competitiveness, delivered by the Vice Minister of Commerce and NCC CEO Iman bint Habas Al-Mutairi.  

Al-Mutairi reviewed the positive outcomes witnessed in Saudi Arabia’s economy and business environment, such as implementing more than 820 economic reforms carried out by 65 government entities since 2016 across nine key sectors. 

About 1,200 regulations and laws have been issued or updated, boosting the legal framework and contributing to making the Kingdom’s business environment one of the leading global destinations for companies and entrepreneurs.

She further underlined that Saudi Arabia allows 100 percent of foreign ownership in most business sectors and has established the Saudi Business Center, which has helped re-engineer procedures for starting and operating enterprises, reducing licensing requirements by 55 percent.  

During the visit, Al-Qasabi participated in the inauguration of the operations center of SMSA Express in South Africa, which will contribute to providing logistical solutions for the business sectors in the two countries.

He also held discussions with several South African ministers, including Parks Tau of trade, industry, and competition; Stella Ndabeni-Abrahams of small business development; Patricia de Lille of tourism; and John Steenhuisen of agriculture.  

Key topics included ways to strengthen trade relations, promising business opportunities in both countries, facilitating trade in goods and services, and South African companies’ participation in the Biban24 forum. 

The meetings also addressed initiatives aimed at supporting and empowering small-and medium-sized enterprises and proposed collaboration in areas of common interest.