Gulf #6504179-v3-opportunities in-the_kingdom_of_saudi_arabia

1

Opportunities in the Kingdom of Saudi Arabia

2

Table of Contents• Introduction • Overview and Opportunities

– Demographics– Economics– Investment Environment

• Infrastructure and Development – Details from the 2012 Budget Statement

• Introduction • Selected Notable Businesses • Opportunities in Saudi Arabia• Blakes in the Gulf

– Why Blakes?– Blakes People

3

Table of Contents

• Overview and Opportunities – Demographics– Economics– Investment Environment


• Selected Notable Businesses • Opportunities in Saudi Arabia• Blakes in the Gulf

– Why Blakes?– Blakes People– Blakes Projects

• Introduction

4

IntroductionKingdom of Saudi Arabia is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab world, after Algeria. It is bordered by Jordan, and Iraq on the north and northeast, Kuwait, Qatar, Bahrain and the United Arab Emirates on the east, Oman on the southeast, and Yemen on the south. The Red Sea lies to its west, and the Persian Gulf lies to the east. Saudi Arabia has an area of approximately 2,250,000 km2 (870,000 sq mi), and it has an estimated population of 27 million, of which 9 million are registered foreign expatriates and an estimated 2 million are illegal immigrants. Saudi nationals comprise an estimated 16 million people.

5

Table of Contents• Introduction



• Selected Notable Businesses • Opportunities in Saudi Arabia• Blakes in the Gulf


• Overview and Opportunities

6

OverviewDemographics• According to the 2010 Census, Saudi Arabia has an

estimated population of 26.1 million.• Demographically, a young country - 38% of population are

younger than 18 years of age.• Will experience a big bubble of young citizens who, over the

next 5 -10 years, will need jobs. • Job creation in Saudi Arabia is expected to drive government

development plans. The government’s goal is to succeed in creating 1.12 million additional jobs for Saudi nationals by 2014.

• About 21% of the population is non-nationals.

Source: Arab News, “New employment rules to shake up Saudi private sector”

7

OverviewEconomy• Oil production is the single, biggest driver of the economy.

However, the government has sought to diversify its industrial base and improve its basic economic structure by developing infrastructure and processing capacity.

• Saudi Arabia’s most recent annual budget (FY 2012) includes revenues of $144-billion and expenditures of about $154.7-billion.

• Saudi Arabia's gross domestic product (GDP) as of 2011 was $651-billion.

• In response to rising unemployment, Saudi Arabia has pursued a multi-pronged approach: Human resource development, education and training, Saudization and other programs.

8

OverviewInvestment Environment

• Saudi Arabia is open to foreign investment in most sectors, with the exception of very few industries, such as upstream oil exploration.

• Saudi Arabia has taken great strides to ease regulatory restrictions and to reform the tax system, propelling it to a highly competitive position (12th) in the World Bank’s 2012 annual Doing Business rankings.

• However, looking behind the rankings, particular in contract enforcement (rank 10th – for 2011) sounds some cause for alarm.

138138Enforcing Contracts

7369Resolving Insolvency

The World Bank’s Ease of Doing Business Rankings for Saudi

ArabiaTopic Ranking

2011 2012

Registering Property 1 1

Paying Taxes 10 10

Starting a Business 14 10

Dealing with Construction Permits 6 4

Protecting Investors 16 17

Trading Across Borders

18 18

Getting Credit 45 48

Sources: Export Development Canada (EDC) Economics Saudi Arabia SpotlightThe World Bank’s Doing Business website

9

Unemployment• As of 2010, the unemployment rate in Saudi Arabia was

estimated to be 10.8%. Employment of Saudis is a key policy of the current administration.

• As part of this policy, the new Nitaqat program aims to boost the employment of Saudis by setting quotas and regulations tailored for each industry.

• Companies looking to enter the Saudi market should include employment of Saudi national as part of their business plan.

10

Seismic Shift in Doing Business Post-WTO

• In the past decade, the Kingdom has experienced a shift towards economic liberalization.

• Some examples:– Foreign investors may own 100% of local subsidiaries in

most actively area – Foreign investors may own real state in Saudi Arabia– Foreign investors may participate in areas that were

previously restricted including, professional services, retail trades and infrastructures.

11



• Selected Notable Businesses• Opportunities in Saudi Arabia• Blakes in the Gulf



12

The following are the main highlight of the budget

• Total revenues are projected at SR 702 (US $187.2) billions.

• Government expenditures are budgeted at SR 690 (US $184) billions.

• Fiscal surplus is projected at SR 12 (US $3.2) billions.

13

Budget Allocations 2012

14

Education & Training• Total allocation of $45-

billion, or 24% of the FY 2012 Budget Allocation.

• An increase of 13% from the FY 2011 Budget Allocation.

• Extends funding for the King Abdullah Scholarships Program.

• Open 40 new colleges.• Over 120,000 students

studying abroad.

• Projects include:– Construction of 742 schools,

in addition to 2,900 schools currently under construction.

– Renovation of 2,000 existing schools.

– Complete construction of newly created university campuses.

15

Health & Social Affairs• Total allocation of $23.1-

billion, or 14% of the FY 2012 Budget Allocation.


• Further supports poverty reduction programs that aim to eliminate poverty.

• Projects include:– Construction of 17 new

hospitals, in addition to 130 hospitals currently under construction.

– Establishment of new primary care centers.

– Construction of sports clubs, social centers, social welfare offices and labor offices.

16

Municipal Services

• Total allocation of $7.8-billion, or 5% of the FY 2012 Budget Allocation.


• Projects include:– Inter-city roads, bridges

and lights.– Other environment-related

projects.

17

Transportation & Telecommunication



• Projects include:– Construction of new roads

totaling 4,200 km, in addition to 28,100 km of road currently under construction.

– Construction of four regional airports and additional berths.

– Construction of King Abdullah Airport Jazan.

– Renovation of King Abdulaziz International Airport Jeddah.

– Expansion of King Khalid International Airport Riyadh.

18

Water, Agriculture and Infrastructure



• Projects include:– Enhancement of water

resources, dams and wells.– Expansion and improvement

of water and sewer networks.– Construction of new and

upgrade of existing water desalination plants.

– Expansion of grain silos.– Various other projects in the

industrial cities of Jubail, Yanbu and Ras Azur.

19

Specialized Credit Institutions & State Financing

• Total allocation of $23-billion, or 14% of the FY 2012 Budget Allocation.

• Provides loans to the industrial and agricultural sectors, and small to medium enterprises, which will support job creation and the enhancement of growth prospects.

• Specialized credit institutions include:– Real Estate Development

Fund– Saudi Industrial Development

Fund– Saudi Credit and Saving Bank– Agricultural Development

Fund– Public Investment Fund– Government Lending Program

20




• Opportunities in Saudi Arabia• Blakes in the Gulf


• Selected Notable Businesses

21

Selected Notable Businesses Selected Notable

Businesses• Saudi Arabian Oil Company (Aramco)• Saudi Basic Industries Corporation

(SABIC)• Saudi International Petrochemical

Company (Sipchem)• The Industrialization & Energy

Services Company (TAQA) • Saudi Oger Ltd.• Kingdom Holding Company• Al Rajhi Bank• Midad Holding

Selected Notable Business Families/Family Businesses• Olayan Group• Tamimi Group• Al Fozan Group• Algosaibi Family• Zamil Group• Abdulla Fouad Holding Co.• Al Turki Group

22

Saudi Aramco

At Saudi Aramco, we’re leading the drive to solve some of the issues that matter most to the global energy industry. We consider it our responsibility – to the Kingdom and the world.

23

Saudi Aramco• Saudi Aramco is the state-owned national oil company of

Saudi Arabia.

• Saudi Aramco is a fully integrated, global petroleum enterprise and a world leader in crude oil exploration, production, refining, distribution, shipping and marketing.

• It is thought to be one of the most valuable companies in the world.

24

Saudi AramcoMajor Projects

• Wasit gas program – set to be the largest gas plant in the Kingdom.

• Karan gas program – their first non-associated offshore gas field.

• Manifa – Arabian heavy crude oil facility.

• Shaybah NGL facilities – low -sulfur sweet gas processing facility.

• Sadara Chemical Company – in partnership with Dow Chemicals, will be one of the world’s largest integrated chemical facilities.

Significant Partners

25

SABIC

Ours is the largest and most reliably profitable public company in the Middle East with sound investor relations. This success is the result of our focus on three things: investment in local partnerships, the best research and technology programs, and an ambitious global growth strategy.

26

SABIC

• SABIC is one of the world’s leading diversified manufacturing companies that specializes in chemicals, fertilizers, plastics and metals.

• According to Forbes, it is the Middle East’s Biggest Public Company.

27

SABICMajor Projects

• Jubail Elastomers Plant –will produce EPDM rubber, thermoplastic elastomers and carbon black.

• Tianjin Project – in partnership with Sinopec, will be a 3.2 million-ton petrochemical complex in Tianjin, China.


28

TAQA

Our vision is to be a leading manufacturer of high-quality products and a provider of best-in-class services to the industrial and energy sectors.

29

TAQA

• The Industrialization and Energy Services Company (TAQA) was established in 2003 as the result of Saudi Arabia’s privatization strategy.

• TAQA’s main role is to identify, assess and develop projects, as well as oversee various business units in Saudi Arabia.

30

TAQASubsidiaries & Activities

• Arabian Drilling Co. – engaged in land and offshore drilling activities and operates land rigs as well as offshore jack-up rigs in Saudi Arabia and the Partitioned Neutral Zone with Kuwait.

• Arabian Geophysical & Surveying Co. – provides land, offshore and airborne geophysical surveying services for the exploration and development of hydrocarbon, mineral and ground water resources.

• Jubail Energy Services Co. – will be the GCC’s first producer of seamless pipes, with a proposed plant that will produce up to 500,000 tons per annum.


31

Kingdom Holding Company

We are one of the world’s premier international investment companies with holdings in some of the world’s best known companies and brands.

32

Kingdom Holding Company

• The Kingdom Holding Company (KHC) is one of the world’s largest and most diversified private investment companies with holdings in many companies internationally.

• KHC is publicly listed in the Saudi Stock Exchange, but the company is almost fully owned by Prince Alwaleedbin Talal, one of the richest men in the world.

33

Kingdom Holding CompanyInterests

• Banking• Real estate• Telecommunications• Broadcasting & media• Entertainment• Hospitality• Computers & electronics• Agriculture• Restaurants• Fashion• Retailing• Automotive manufacturing

Significant Investments

34

Olayan Group

We distribute everything from surgical supplies to photocopiers, candy bars to instant cameras, heavy trucks to generator sets. In these and many other ways, we have an impact on our home market that is both deep and wide.

35

Olayan Group

• Olayan Group is a Saudi conglomerate with an establishment of affiliates and partnerships in many different industries.

• In Saudi Arabia, Olayan Group engages in product distribution, manufacturing, services and investment, often in partnership with leading multinational and regional partners.

• Internationally, it invests in public and private equities, including real estate.

36

Olayan GroupActivities

• Construction• Trading• Bottling and distribution of

Coca-Cola• Food processing and

restaurants• Plastics and fibers• Paper


37

Zamil Group

Our vision is to be a prominent industrial and trading group with growing influence in global markets.

38

Zamil Group

• Zamil Group Holding Company (ZGHC) is a global investment company with diverse interests and capabilities.

• ZGHC provides innovative, high quality and price competitive products and services as well as investment opportunities for investors, partners and stakeholders in the industrial, petrochemicals and services sector.

• ZGHC began investing the the plastics industry almost 30 years ago, and later entered the chemical and petrochemical industry.

• ZGHC’s Board of Directors is comprised of 12 sons of the Zamil family.

39

Zamil GroupInvestments & Companies

• Concrete products• Steel products• Insulation products• Glass products• Air conditioners• Trade & services• Real estate• Petrochemicals & chemicals• Investment


40

Al Turki Group

We strive to be a premier developer and partner of choice for building great businesses.

41

Al Turki Group

• Al Turki Group is a leading family-owned investment and development company that has been operating in Saui Arabia since 1973.

• Its subsidiaries and joint venture companies are involved in contacting, trading, manufacturing and consulting focuses specifically on the construction, infrastructure, oil field, environment, renewable energy, real estate, power, telecommunications and general industrial sectors primarily in Saudi Arabia.

42




• Selected Notable Businesses

• Blakes in the Gulf– Why Blakes?– Blakes People– Blakes Projects

• Opportunities in Saudi Arabia

43

Domestic Consumption of Oil Production

• Saudi Arabia is consuming more and more oil equivalents to produce electricity and desalinated water.

• By 2028 Saudi domestic energy demand is expected to rise by 250%, making it the second-biggest source of global oil demand growth after China.

• To put that into perspective, that’s 86% of the Kingdom’s present daily production (9.6 million bpd) and, by 2028, will also represent a sizable percentage of daily production.

44

Meeting Demand for Electricity and Water

• Saudi Arabia has established the King Abdullah City for Atomic and Renewable Energy (K.A.CARE) to promote and develop renewable and atomic energy in Saudi Arabia.

• The Fourth Saudi Solar Energy Conference: Target Solar Capacity by 2032 – 41GW– 16GW Solar PV– 25GW Solar CSP

• Energy efficiency is more complicated.

45




• Selected Notable Businesses• Opportunities in Saudi Arabia


• Blakes in the Gulf

46

Why Blakes?

• Blakes serves MENA from Bahrain and the Eastern Province of Saudi Arabia.

• Blakes is a leader in having Western-trained lawyers in the Eastern Province.

• Blakes offers the only full service English/Arabic firm in the Eastern Province.

• Others have entered the market but are playing catch up.

47

Blakes in the GulfBlakes People

Dr. Saud Al-Ammari, Chair Saudi Arabia & Gulf Region

Over the past two decades, Saud has built a prominent and impressive legal career, as well as an extensive network of business and professional contacts throughout the Gulf Region, Europe and North America. With experience in a wide variety of corporate and commercial legal matters both inside and outside the KSA, he served for 10 years as special counsel and later in-house counsel for Saudi Aramco, the world's largest oil producer. He has advised the KSA in a number of capacities, including as legal adviser to the Minister of Petroleum, general counsel to the Ministry of Petroleum and Mineral Resources, as a member of the Kingdom's negotiation team for the implementation of the Kingdom's Natural Gas Initiative, and as chief legal officer for the Royal Embassy of Saudi Arabia in the United Kingdom. His practice included major litigation and arbitration matters on behalf of Saudi Aramco and the Kingdom. Notably, Saud served as chairman of OPEC's legal defence team, which successfully handled two U.S. antitrust class action cases brought against OPEC and its member countries.

48

Blakes in the GulfBlakes PeopleDr. Abdullah Al Ghamdi, Consultant

Abdullah is a senior lawyer in the Al-Khobar office and is licensed to practice law in the Kingdom of Saudi Arabia. He focuses on the practice of Saudi law and is a Shari’ah law expert with extensive experience in a wide range of corporate and commercial legal matters within the Kingdom of Saudi Arabia, including an emphasis on arbitration and litigation matters. Abdullah has handled matters involving complex commercial cases before the Board of Grievances as well as financial cases before the CMA and SAMA Dispute Resolution Committees, mergers and acquisitions, commercial litigation and arbitration, banking and privatizations. Throughout his legal career, Abdullah has incorporated numerous Saudi entities including joint venture limited liability companies and other forms of companies in Saudi Arabia.

Before joining Blakes, Abdullah was a senior legal advisor to the Ministry of Petroleum, Saudi Aramco and Petromin Refinery in Riyadh, where he advised on a wide variety of oil and gas, energy, mining, infrastructure and concession-related contracts.

In addition to his commercial expertise, he is well-acquainted with the inner workings of the Saudi administrative and regulatory agencies. Abdullah has worked extensively with many Saudi Arabian governmental bodies, including the Ministry of Commerce and Industry and the Ministry of Petroleum & Mineral Resources.

49

Blakes in the GulfBlakes PeopleAdnan Al-Hashimi, Consultant

Adnan Al-Hashimi is a Consultant in our Business Group. He served for three years as financial analyst and 23 years as senior counsel, special counsel and general attorney for Saudi Arabian Oil Company (Saudi Aramco), the world's largest oil producer. His practice includes handling and managing major litigation and arbitration cases, and dealing with government ministries and regulatory bodies related to project development including Saudi Royal Commissions.

Adnan is a board member of the Islamic Culture Center and a member and secretary of the board of the Social Development Association.

50

Blakes in the GulfBlakes PeopleRobert Kirchhoff, Consultant

Robert Kirchhoff joined Blakes after serving as sole in-house counsel for a major industrial and oilfield services conglomerate in Saudi Arabia. Prior to his role as in-house counsel, he was a partner at one of 200 largest law firms in the United States.

Robert has advised on the structuring and execution of numerous corporate transactions, including mergers and acquisitions, corporate and debt financing and public and private securities offerings. His expertise also extends to structuring and advising on joint venture and shareholder agreements, industrial investment, United States securities laws and corporate governance matters.

Robert has represented clients primarily in the energy, oilfield services and manufacturing industries. His clients have ranged from major, integrated oil and gas companies to start ups and from individual investors to investment funds and target companies. He has also represented special committees of boards of directors of public companies.

51

Additional Information

In you need additional information regarding doing business in Saudi Arabia, please contact:

Robert KirchhoffKSA mobile: +966 50 319 5123Bahrain mobile: +973 3 626 3088Email: [email protected] the general office number: +966 3 847 5050

52

Thank you

Travel

Gulf #6504179-v3-opportunities in-the_kingdom_of_saudi_arabia