Saudi Aramco’s trading arm plans to open an office in London soon as it expands its international business, sources familiar with the move said.

Aramco Trading Co (ATC) also opened an office in the bunkering hub of Fujairah, United Arab Emirates in December to trade oil products and hired two traders from Trafigura and PetroChina to run operations there, the sources said.

“Last June, a trading office was inaugurated in Singapore, and last December (another) in Fujairah and very soon in London, just like any trading house,” one of the sources said.

Another source said: “They have moved a few trading desks to Singapore and Fujairah. London is surely next.”

A third source said the London office might be inaugurated as early as next week during International Petroleum (IP) Week, an industry event held annually in the British capital.

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Saudi Aramco, the parent company, already has an office in Marylebone, London. The ATC London operations may be located in the same place as the parent company and are likely to start with a handful of crude oil traders, one of the sources said.

ATC did not immediately respond to a request to comment.

The trading sector faces increased rivalry between national oil companies (NOCs), international oil firms and Swiss merchants. NOCs have cheap feedstock and strength in refining, allowing them to compete aggressively with oil majors and especially traders that lack their own production.

ATC aims to boost its trading volumes in crude and refined products to 6 million barrels per day (bpd) by 2020 and the company’s headquarters will remain in Dhahran, Saudi Arabia, ATC’s chief executive told Reuters last year.

The CEO, Ibrahim al-Buainain, also said the plan to open an ATC regional office in Europe - either London or Geneva - was set for the first quarter of 2019.

Middle East oil producers are venturing into buying and selling oil to boost their incomes as a sharp drop in crude prices since mid-2014 has forced the industry to become more efficient and commercially focused.

State-owned Abu Dhabi National Oil Co is establishing a new trading operation along with Italy’s Eni and Austria’s OMV.

ATC was set up in 2012 initially to market refined products, base oils and bulk petrochemicals, but has since expanded into crude trading mainly to feed international Aramco joint ventures such as the U.S. Motiva refinery and S-Oil in South Korea.

Aramco, the world’s top oil producer and exporter, aims to become the largest integrated energy firm, with plans to expand refining operations and petrochemical output. It pumps around 10 million bpd of crude, of which it exports about 7 million bpd.

The company plans to raise its refining capacity - inside Saudi Arabia and abroad - to 8-10 million bpd, from around 5.4 million bpd now. Aramco is expanding its refining business at home as well as in new markets particularly in Asia. (Writing by Rania El Gamal; Editing by Dale Hudson)

Source: reuters

Why Do Business in Saudi Arabia?

Although parts of the Middle East and North Africa have seen political turmoil since the start of 2011, Saudi Arabia has remained stable and investors still view it as an attractive place to do business.

The Saudi Riyal is one of the world's most stable currencies and there have been no significant changes in its exchange value during the last three decades.

The key reasons for investing in the Kingdom include:

It is one of the world's 25 largest economies and the largest economy in the Middle East and North Africa Region - MENA.

The Kingdom is one of the world's fastest growing countries worldwide, with per-capita income forecast to rise from USD $25,000 in 2012 to USD $33,500 by 2020.

It has substantial cost advantages due to the low domestic cost of energy and industrial land due to generous subsidies and incentives.

It provides duty free access to other GCC and MENA economies and enjoys good transport and infrastructure links which will soon be supplemented by a national rail system.

Opportunities in Saudi Arabia

Saudi Arabia has a very fast growing economy - GDP growth in 2012 reached over 6%. The booming economy is creating great opportunities for both exporters and investors. These are further boosted by moves to diversify the economy away from dependence on oil and gas, economic reform, market liberalisation and a growing private sector.

Investors in Saudi Arabia enjoy increasingly well-developed business clusters and value chains that set the nation apart from its neighbours and from other emerging economies. The World Economic Forum ranks the Kingdom 6^th in the world for Local Supplier Quantity and 24^th for both Value Chain Breadth and Production Process Sophistication. Well established, competitive and efficient, Saudi Arabia’s domestic industries – from energy and chemicals to transportation – provide industrial projects with exceptional opportunities for cost savings.

There are opportunities at all levels in:

• Oil, gas and petrochemicals
• Power, including nuclear and renewable energy
• Water and wastewater
• Financial and professional services
• Education, training and human capital development
• Mass transport infrastructure including new rail, metro and bus links
• Environmental technology and services
• ICT
• Consumer and luxury goods
• Defence and security
• Healthcare and Life Sciences
• Mining

Key Sectors

Energy
The KSA’s most prominent sector is poised for unprecedented growth, diversification and profitability. The high oil revenue environment has spurred a boom in both oil and non-oil development projects. Unlike previous investment cycles the current round of investment projects is marked by heavy private sector participation with USD $79 billion in private-sector energy projects under development. Activity in the world’s premier energy economy will develop rapidly as large scale capital spending is applied to building new capacity and expansion of existing facilities. For example, the Arab Oil and gas directory forecasts major new energy investments in KSA, including:

Petrochemical projects USD $90 billion

-  Power generation USD $90 billion

-  Water desalination plans USD $88 billion

-  Natural gas-related projects USD $50 billion

Education
Already the world’s 8^th highest education spender, Saudi Arabia recently initiated a complete reform of the current education system, building new educational institutes and funding overseas degrees and training programmes for Saudi students. The primary focus regarding the education sector is to educate young Saudis to fill jobs which are currently being held by expatriates. Despite this budget figure, it's vital for Saudi Arabia to attract a substantial amount of foreign investment in education to meet rapid growth demands.

Security and Defence
Defence & Security sector is one of the important sectors in Saudi Arabia, providing enormous opportunities for British companies. Security is a fast growing sector which is currently estimated to be worth between SR 2.27 - 2.51 billion (USD $605 - $670 million.) Of this figure, around SR 318.8 million (USD $85 million) accounts for physical and electronic security for the banking sector. The balance is for government, industrial, retail, residential and commercial sectors. The Saudi government's defence budget continues to grow, standing approximately at SR 153.8 billion USD $41 billion. The Saudi defence relationship with the UK remains strong,as shown by the recent order for 72 Typhoon aircraft.

Construction
Saudi Arabia represents the largest construction market in the Middle East and one of the fastest growing construction markets in the world. They key areas that are currently being focussed on are improving infrastructure, transport, education and real estate all of which will require construction related activity. According to SAGIA, there is a USD $100 billion planned investment over the next 10 years in transport projects.

Financial and Professional Services
The Saudi banking sector is stable and has not experienced much turmoil during the global financial crisis. The Saudi Stock Exchange (Tadawul) is now the largest in the Gulf region. The Stock Exchange is keen to attract limited foreign participation, develop the derivatives market and to start up a future market for other than just oil. It will shortly move to the new King Abdullah Financial District in Riyadh along with major banks and other service providers.

Healthcare
Healthcare is a thriving sector as the government continues to finance healthcare for its rapidly growing population. Saudi Arabia is the largest market for medical equipment and healthcare products in the Middle East, with the opportunity to cater to unmet demand across the healthcare value chain including medical education, research, facilities, provision and reimbursement.

ICT
Saudi Arabia is the region's largest IT market with strong growth in consumer and enterprise end markets. Huge public investments on infrastructure, health and education have paved the way for advanced technology and security systems in the country with the government planning for the industry to raise its contribution to the GDP by 20 percent by 2020. The IT market in the country was valued at USD $3.6 billion in 2011 and is expected to go up to USD $4.9 billion by 2014.

Liberalisation is occurring across the telecommunications industry, driving increases in competition, service levels and usage. Significant unmet demands for web-based and mobile services and increased enterprise and government commitment for web-based services provide large-scale opportunities for contractors and service providers, with massive public investment in connectivity for Economic Cities, providing unique opportunities for greenfield projects covering millions of users. 

Industrial Cities
Today, industrial products make up more than 90 percent of the Kingdom's non-oil exports. Saudi Arabia exports petrochemicals, plastics, metal goods, construction materials and electrical appliances to more than 90 countries.

The Saudi Industrial Property Authority (MODON), is responsible for developing and supervising industrial land in the Kingdom. Their aim is to promote and regulate Industrial Estates and Technology Zones and to encourage the private sector to become involved in their development and operation. Since it was created in 2001, MODON has been working towards a Saudi development vision for the 21st century. They are currently building six new industrial cities and have expressed an interest in dealing with UK consultants for master planning, design, operation and maintenance, and facilities management.

Economic Cities
In addition to the sectors and industrial cities mentioned above, Saudi Arabia is investing billions of dollars into the launch of four Economic Cities in different regions of the country:

• King Abdullah Economic City - Rabigh (near Jeddah)
• Prince Abdul Aziz bin Mousdaed Economic City - Hail
• Knowledge Economic City - close to Al Madinah
• Jazan Economic City - close to Jazan City

These cities, once constructed, will be public-private partnerships that will create attractive investment platforms for foreign companies. Each is designed to maximise investment potential in all sectors and deliver huge advantages to business located there. The cities will promote economic diversification, create over a million new job opportunities, homes for 4-5 million people and contribute an estimated USD $150 billion to Saudi’s GDP.

Source: DoingBusinessGuide

Saudi Arabia unveils seven principles to raise investment

Saudi Arabia has unveiled seven investment principles, issued by royal decree and based on international best practice, that will support the development of a competitive investment environment in the Kingdom.
“The rapid pace of economic transformation in the coming years is opening exciting investment opportunities, both in Saudi — a G20 economy opening up to international businesses — and in the broader Middle East,” said Ibrahim Al-Omar, governor of the Saudi Arabian General Investment Authority (SAGIA).
The investment principles are:

Ensure equality between Saudi and foreign investors; ensure protection of investments.

enable sustainability of investment; provide access to equal investment incentives

implement social and environmental standards and ensure investor compliance with Saudi health, safety and environmental regulations

 facilitate access procedures for foreign workers and their families; and ensure a solid transfer of knowledge

technology and enhancement of local human capital.

Source: Arab News

تقارير اقتصادية تستبق "ملتقى الشركات الناشئة والمتوسطة" في دبي

(English)

دبي 22 يناير 2019

تشير الدراسات والتقارير الاقتصادية و الدولية إلى أن المشروعات الناشئة والمشاريع الصغيرة والمتوسطة، ستقود قاطرة النمو الاقتصادي في دولة الإمارات ودول مجلس التعاون الخليجي، خلال السنوات القليلة المقبلة، بالإضافة إلى أنها ستوفر العديد من فرص العمل اللازمة، إلى جانب مساهمتها بنصيب كبير في إجمالي القيمة المضافة وقيامها بتوفير السلع والخدمات، بأسعار في متناول اليد لشريحة واسعة من ذوي الدخل المحدود.

وقال الدكتور أديب العفيفي، مدير البرنامج الوطني للمشاريع والمنشآت الصغيرة والمتوسطة، الذراع التنفيذية لمجلس المشاريع الصغيرة والمتوسطة في وزارة الاقتصاد" تنبهت دولة الإمارات مبكراً إلى أهمية الشركات الناشئة الصغيرة و المتوسطة في رفد الاقتصاد الوطني، ومكانتها في رفد الناتج المحلي الإجمالي، فسارعت إلى الاستثمار في هذا القطاع، واستحدثت النظم والتشريعات الاقتصادية اللازمة التي ترفد هذا القطاع، وتعزز مكانته، بهدف استقطاب المزيد من المستثمرين المحليين والعالميين إلى هذا القطاع الحيوي".

وأضاف العفيفي" على الرغم من أن هذا النوع من النشاط الاستثماري يواجه العديد من التحديات في معظم الدول النامية، تتمثل بالصعوبات التسويقية والإدارية، وانخفاض الإمكانات المالية لهذه المشاريع، التي تؤدي بالضرورة إلى ضعف الكفاءة التسويقية، إلا أن دول مجلس التعاون الخليجي، وفي مقدمتها دولة الإمارت تنبهت ألى هذه التحديات، فأطلقت البرنامج الوطني للمشاريع والمنشات الصغيرة والمتوسطة، وتبنت تعزيز وتشجيع هذه الاستثمارات عبر مشروعها، ووفرت لها البيئة المثالية، التي تمكّنها من فرض حضورها وتنافسيتها في الأسواق المحلية والعالمية".

وجاءت نتيجة الدراسات والتقارير الاقتصادية، في ظل المؤشرات التي تتوقع أن تصل الاستثمارات في قطاع الشركات الناشئة في منطقة الخليج إلى 2 مليار دولار أميركي خلال العقد المقبل، وفقاً لدراسة جديدة أجرتها أحدى المكاتب الاستشارية الدولية في المنطقة

علماً بأن دولة الإمارات العربية المتحدة، والمملكة العربية السعودية، ستلعبان دوراً مهماً في تحفيز إمكانيات النمو في منطقة الخليج، وفي بلورة وتشكيل قطاع الفنتك في المنطقة العربية، مما يضعهما في صدارة التحوّل في قطاع الفنتك، مدفوعين بعوامل عديدة، منها تبنّي القيادات العليا نهجًا لإنشاء بنى متطورة لمدن المستقبل الذكية، واعتماد ارتباطية إلكترونية للفرد في المنطقة تمثل 45% من اقتصادات المنطقة العربية.

وبحسب إحصائيات تقرير الاستثمار فقد حقق عام 2018 أرقاماً قياسية بالنسبة للشركات الناشئة في منطقة الشرق الأوسط وشمال إفريقيا ، حيث تضاعف عدد الصفقات المسجلة وزيادة في التمويل بنسبة 31٪. كما كان هناك زيادة بنسبة 5٪ في عدد المؤسسات ومجموعات الملاك التي تستثمر في الشركات الناشئة القائمة في منطقة الشرق الأوسط وشمال أفريقيا ، مما زاد عدد المؤسسات الاستثمارية إلى 30٪ منها من خارج المنطقة.

ويعكس الاستثمار في هذه النوعية من الشركات والمشروعات مكاسب اقتصادية مجزية، نظراً لسهولة تأسيسها، وعدم حاجتها إلى رأس مال كبير، أو تكنولوجيا متطورة، إضافة إلى قدرتها على الإنتاج والعمل في مجالات التنمية الصناعية والاقتصادية المختلفة، فضلاً عن توفيرها فرص عمل بكلفة استثمارية منخفضة وذلك لطبيعة الفن الإنتاجي المستخدم حيث أسلوب الإنتاج كثيف العمل خفيف رأس المال، مما يعزز دورها في امتصاص البطالة.

وتنبع أهمية قطاع الشركات الناشئة والمتوسطة من خلال قدرتهاعلى تدعيم التجديد والابتكار وإجراء التجارب التي تعتبر أساسية للتغير الهيكلي من خلال ظهور مجموعة من رواد الأعمال ذوي الكفاءة والطموح.

وفيما يتعلق بتوفير البيئة المثالية للشركات الصغيرة والمتوسطة، تعتبر دولة الإمارات من أوائل الدول التي استشرفت مستقبل الاقتصاد، ووفرت بيئة حاضنة لهذه المشروعات، من خلال حزمة النظم والتشريعات التي تشجع هذه النشاطات الاقتصادية، وتحفز روادها على المضي في مشاريعهم في بيئة مناسبة، ومناخ استثماري زاخر بالفرص للمشروعات الصغيرة والمتوسطة.

وكانت وزارة الاقتصاد في دولة الإمارت أنشأت البرنامج الوطني للمشاريع الصغيرة والمتوسطة، بهدف تمكين المؤسسات الناشئة الصغيرة والمتوسطة، ووضع أطر عامة ومبادئ توجيهية تهدف إلى توفير الخبرات اللازمة والدعم التقني والإداري والتدريب لأصحاب المشاريع الصغيرة والمتوسطة الحجم.

وتؤكد النسخة الثالثة من ملتقى الشركات الناشئة، التي تستضيفها دبي بالشراكة مع البرنامج الوطني للمشاريع الصغيرة والمتوسطة، التابع لوزارة الاقتصاد، الذي يدعم الشركات الناشئة والمبتكرة طيلة ثلاثة أيام في الفترة من 8 وحتى 10 أبريل المقبل في مركز دبي التجاري العالمي، على أهمية قطاع الشركات الناشئة والمتوسطة في الاقتصادات الوطنية.

ويقدم الملتقى الذي ستنضوي تحت مظلته نحو 500 شركة ناشئة ومتوسطة، وأكثر من 20 ألف زائر ،فرصة لاستكشاف أبرز الفرص الاستثمارية التي يتيحها المناخ الاستثماري في الإمارات، كما يمنحها فرصة
استكشاف الحلول المبتكرة والفرص الاستثمارية واقامة الشراكات وتبادل المعرفة مع رواد الأعمال، فضلاً عن فرص تمويل مشاريعها الريادية

ويعتبر الملتقى منصة للشركات الناشئة والمتوسطة، للاطلاع على ما يتمتع به أعضاء برنامج وزارة الاقتصاد الإماراتية، من مزايا تعكس أهمية هذا القطاع، عبر منحهم تسهيلات إئتمانية وفرص تنافسية لترويج وتسويق منتجاتهم في ظل تشريعات وإجراءات مبسطة.

ويجذب ملتقى الشركات الناشئة، أكثر من 20.000 مشارك، يزداد أعدادهم سنوياً من شتى أنحاء العالم ، نظراً لدوره الفاعل في تنظيم وتدفق الاستثمارات، للعديد من الشركات الناشئة والشركات الصغيرة والمتوسطة، كما يوفر على مدار ثلاثة أيام مظلة اقتصادية مهمة، لنخبة من صنّاع القرار، ورواد الأعمال، والخبراء الاقتصاديين، وكبريات الشركات، فضلاً عن الشركات الناشئة التي تبحث رؤوس أموالها عن استثمارات آمنة، كما يبحث في مستقبل الاستثمار في دولة الإمارات العربية المتحدة، عبرالاطلاع على الفرص الاستثمارية، التي يوفرها قطاع الشركات الناشئة والمتوسطة، إلى جانب بحث الرؤى المشتركة حول أبرز الموضوعات التي تتناول مستقبل الاقتصاد العالمي، وواقع الاستثمار في هذا المجال.

Economic reports ahead of AIM Startup 2019 in Dubai

(عربي)

Dubai, January 22, 2019

International economic studies and reports indicate that startups and small and medium-sized enterprises (SMEs) will lead the economic growth in the UAE and the GCC over the next few years. This will promote job generation which will contribute largely to an increase in consumption and spending of low-income people.

"The UAE has been alerted early to the importance of startups and SMEs in supporting the national economy and its place in contributing to GDP, " said Adib Al-Afifi, Director of the National Program for Small and Medium Enterprises (SMEs), Ministry of Economy. “We have introduced the necessary economic regulations and legislation that provide stability to the sector, and to strengthen its position, in order to attract more domestic and international investors."

Al-Afifi added, "Although this type of investment activity faces many challenges in most developing countries, it is the marketing and administrative difficulties and the low financial potential of these projects, which necessarily lead to weak marketing efficiency. However, the GCC countries, specifically the UAE, has been alerted to these challenges, thus has launched the National Program for Small and Medium Enterprises. We have adopted and promoted these investments as well as provided the ideal environment to enable these projects and impose their presence and competitiveness in the local and international markets."

According to a new study conducted by one of the international consulting offices in the region, investments for startups and SMEs in the Gulf region will reach US $2 billion over the next decade, compared to only US $150 million invested in the last ten years.

The United Arab Emirates and Saudi Arabia will play an important role in stimulating the growth potential of the region and in developing startup ecosystem in GCC. This scenario places both UAE and Saudi Arabia at the forefront, developing and sustaining an active startup ecosystem while keeping a solid pace as major international cities race to build their own smart cities using disruptive technologies.

According to investment report statistics 2018 has proven to be a record year for startups in MENA, with 366 recorded deals and an increase of funding by 31%. There was also in an increase of 5% in the number of institutions and angel groups investing in MENA-based startups increasing the number of investing institutions to 155, 30% of which are from outside the region.

UAE’s Ministry of Economy has established the National Program for Small and Medium Enterprises with the aim of empowering SMEs and developing general frameworks and guidelines aimed at providing the necessary expertise, technical and managerial support and training for SMEs.

This emphasis is being shared by the third edition of AIM Startup, a global platform for entrepreneurs which is under the patronage of the Ministry of Economy. Hosted in partnership with the National Program for Small and Medium-Sized Enterprises, AIM Startup will once again support emerging and innovative companies for three days from 8-10 April 2019 at the Dubai World Trade Centre.

AIM Startup anticipates more than 20,000 visitors who will maximize the global networking opportunities onsite. At AIM Startup, innovators are linked with potential investors and can benefit from the investment climate to form collaborative partnerships, facilitate investment deals, and gain knowledge from industry players and thought leaders.

About AIM Startup

AIM Startup was launched in 2017 as an initiative of the UAE Ministry of Economy to connect promising startups with investors and business partners from other parts of the world — set in the heart of the UAE’s Annual Investment Meeting, the world’s leading FDI platform for emerging markets and held under the patronage of H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

AIM Startup is an ideal platform for start-up companies looking to raise capital, expand into new markets and forge meaningful business relationships with major investors, business leaders, representatives of international institutions and government entities.

For press inquiry, kindly call or email:

Shereen Hassan Al Musalami

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Mobile number: +971 56 4034071

For companies expanding their operations to Saudi Arabia, it can be a complex and lengthy process. The government has encouraged foreign investment and made reforms to make the process easier for companies, however, challenges still exist. Corporate immigration is a process that requires a lot of time and resources and it is essential that companies perform their due diligence to ensure they are compliant throughout the process. Below we break down corporate immigration into the Kingdom and what you need to know.

What is the government’s policy towards corporate immigration?

The Saudi government have shown a pro foreign investment attitude. by making the necessary reforms to encourage foreign investors to enter the Kingdom. These reforms, aligned with Vision 2030, aim to improve the environment for foreign investment and lower the barriers to entry.

The government have created laws and regulations that create a risk-avert environment for companies to thrive in. (read more)

With climate change perceived as the most pressing risk for the world today, government officials and energy experts are emphasizing the importance of shifting toward a global green economy.
According to the Bank of America Merrill Lynch’s Thematic Investing report, the 17 warmest years on record occurred in the 21st century, and 2018 could be the 42nd consecutive year where global temperatures rise above the 20th-century average.
This year’s Intergovernmental Panel on Climate Change also warned that we are currently heading toward a 3C rise in temperature, with the 1.5C barrier potentially breached in 12 years, by 2030.

As extreme weather is recognized as the foremost global risk today, affecting 10 to 12 percent of the globe compared to 0.1 to 0.2 percent from 1951 to 1980, the frequency and severity of heatwaves, hurricanes, floods and droughts are intensifying. But green capital, digital transformation and social engagement can play a fundamental role in nations helping fight the cause by transitioning to a green economy.(read more)

SoftBank has hired Deutsche Bank to advise on its power investment plans in Saudi Arabia, two sources familiar with the matter said.

The Japanese firm, which is planning to invest in a giant solar power plant in the kingdom, has also shown interest in electricity distribution in the world’s top oil exporter, they said.

One source said SoftBank could consider purchasing a minority stake in Saudi Electricity from the Public Investment Fund (PIF) sovereign wealth fund.

“They want to become a minority shareholder of influence,” the source told Reuters.

PIF owns a 74 percent stake in Saudi Electricity. The other major shareholder is state oil giant Aramco, which owns a nearly 7 percent stake.

A SoftBank spokeswoman declined to comment. PIF and Deutsche Bank also declined comment. Saudi Electricity did not respond to a Reuters request for comment. (read more)

 (English)

أجرت منصة رواد الأعمال العرب السويسريين (SA Entrepreneurs) لقاءً مع راي دارغام (Ray Dargham)، المؤسس والرئيس التنفيذي لمجموعة STEP، وذلك على هامش مؤتمر STEP Start 2018 في دبي لمناقشة المشهد الريادي في المنطقة والمآلات المستقبلية لهذا القطاع المتسارع النمو.

(العربية)

SA Entrepreneurs sat down with Ray Dargham, Founder & CEO, STEP Group, on the sidelines of the 2018 STEP Start Conference in Dubai to discuss the entrepreneurial landscape in the region and what does the future hold for this rapidly growing sector.