Holland Gulf Chamber of Commerce » GCC

GCC industrial investments exceed USD338 billion

jochemgeheniau — Mon, 16 Dec 2013 08:40:55 +0000

Total Industrial investments in the GCC have jumped from $81 billion in 1998 to $338 billion in 2012.
The Gulf Organization for Industrial Consulting ( GOIC ) revealed some figures about the progress of industrial activities in GCC countries.
The number of firms in the GCC jumped from 7,089 in 1998 to 15,165 in 2012. The number of workers grew from 55,9420 workers to 1.34 million workers.
Most of these investments were in the areas of chemicals, refining petroleum products, base metals, construction metals, building materials and food industries.
GOIC highlighted these figures during the “Reality and prospects of UAE national industrial sector” conference in Sharjah, according to a press release here.
It is taking place with the support of Sheikh Sultan bin Mohammed Al-Qasimi, member of the Supreme Council of the UAE and Ruler of Sharjah.
This conference aims at introducing high-quality UAE industries at the regional and international levels and discussing means of developing and diversifying them.
GOIC Secretary General Abdulaziz bin Hamad Al-Ageel gave a keynote speech in which he highlighted the Gulf industrial sector development.
Al-Ageel said: “More than 83 percent of GCC industrial firms are small and medium industries, but most industrial investments are in the area of big industries. More than 95.8 percent of the cumulative investments in the industrial sector of the Gulf.”
He added: “As to the contribution of the industrial sector in GCC countries’ GDP, it ranged between 9.5 percent and 10.5 percent from 2001 to 2012, except for 2008 when it was reduced to 8.5 percent because of the global financial crisis.”
GCC countries also maintained a positive growth in the manufacturing industry value added in terms of the GDP throughout the last five years.
The GOIC secretary general stressed the role of GOIC in supporting industrial development projects in GCC countries by developing GCC industrial and economic databases, preparing several studies about the industrial sector and suggesting industrial investment opportunities in GCC countries.
In addition, GOIC provides public and private sectors with technical consulting services.
It also prepares studies and reports at the regional level, notably the GCC industrial map project that shed light on missing industries and target industries in GCC countries.
The organization suggested and promoted several investment opportunities in different GCC countries in coordination with chambers of commerce and industry and ministries of industry and trade.
Al-Ageel reiterated GOIC ‘s will to keep up with international developments and their repercussions on manufacturing industries and knowledge-based industries in GCC countries.
The organization publishes an annual report about the readiness of GCC countries to move to knowledge-based industries.
In the last three years, analysis has led to two groups of states: the first is for countries that achieved remarkable progress toward knowledge-based industries and includes Saudi Arabia, UAE and Qatar.
These countries will be ready to move to knowledge-based industries by 2020 if they manage to fix their current vulnerabilities.
As to the second group, it includes Kuwait, Oman and Bahrain. They should deploy additional efforts to move to knowledge-based industries.
Al-Ageel also commended GCC countries for their achievements in this area.
He said: “Knowledge-based industries and industry innovation clusters have five pillars, and human resources is the most important pillar. In this regard, GCC countries made a quantum leap in terms of expanding the reach of basic, secondary and university education. Nevertheless, further efforts should be deployed to improve the quality and quantity of professionals in the area of knowledge. As to the second pillar, it is a framework for developing knowledge-based industries. GCC countries adopted excellent macroeconomic policies, and while frameworks of business policies still differ between these countries, they are generally solid but with some room for overcoming a number of restrictions.”
The GOIC secretary general said: “The third pillar is a combination of capital, funding and liquidity.
Although they are largely available in the region, there is a need to expand financing structures that are necessary to develop knowledge-based industries. Innovation systems are the fourth pillar. They encompass collective assets and operations boosting innovation in business applications. Foundations for supporting innovation systems in the GCC are being laid, but these initiatives are still immature and require additional time and attention in order to reinforce innovation capacities.”
As to the fifth pillar, Al-Ageel said: “It is knowledge-based industry infrastructure; GCC countries have a relatively advanced infrastructure to develop knowledge-based industries, but further changes to some policies should be implemented.”
He reiterated: “GCC countries need a specific policy for knowledge-based industries, since this type of knowledge has several implications on policies such as protecting knowledge assets and investing in producing or using knowledge assets. Government policies can develop appropriate frameworks to protect intellectual property that encourages producing and sharing knowledge between all stakeholders.
In addition to that, technical infrastructure and innovation are necessary, but they are not enough to prove the active development of manufacturing industries and to reinforce knowledge-based industries.
These industries require appropriate legal and business environments in order to prosper and thrive in open and competitive markets. In fact, policies play a major role in determining these conditions.”
Al-Ageel reminded governments and industrial investors that “knowledge-based strategies rely on competitive advantages in different countries. Therefore, industries with competitive advantages have a wide reach and benefit from established skills. They need comprehensive political reforms to provide a vibrant work environment which reduces bureaucracy barriers, improves access to financing and regulatory and statutory frameworks, and help improving education that is the first milestone toward responding to the pressing need for human capital.”
Al-Ageel said: “Governments should play a bigger role in providing knowledge networks and public-private partnerships (PPPs). Such measures would reinforce knowledge-based industries, give priority to small and medium knowledge-based industries and boost privatization.”

KSA construction valued USD495bn

jochemgeheniau — Wed, 20 Nov 2013 09:32:38 +0000

The Saudi construction market, the most valuable market in the GCC at present, is valued at $495 billion, including projects currently under way and those confirmed and in pre-execution stage.
Local companies, including Saudi Basic Industries Corporation (SABIC), Saudi Pipes Company and Saudi Export Development Authority, will be taking advantage of the opportunity to showcase the latest innovations and technologies to the regional and international audience at the Big 5 2013.
“The construction industry in Saudi Arabia has been one of increasing significance for several years,” said Andy White, group event director of the Big 5. “We see interest from Saudi companies looking to highlight local market expertise and experience, as well as interest in Saudi market opportunities and expanding business in the Kingdom. This has been a country whose presence has grown year-on-year at the event, and as the highest recipient of FDI in the region over the past 20 years, and with six economic cities, transport, power and oil and gas facilities currently under construction, we expect this trend will continue.”
The Big 5 will take place from Nov. 25-28 at the Dubai World Trade Centre, Dubai, with Middle East Concrete and PMV Live, showcasing the latest from the concrete, plant, machinery and vehicle industries.

GCC industrial water treatment chemicals market revenue to soar

jochemgeheniau — Mon, 18 Nov 2013 09:02:15 +0000

JEDDAH – The water and wastewater treatment chemicals market in the Gulf Corporation Council (GCC) is making considerable headway as the dire water shortage has lent momentum to water treatment activities. Industrial water reuse schemes and stringent desalination requirements are further necessitating the deployment of high-quality treatment chemicals as a means to boost operational efficiency, cost-effectiveness, and environmental sustainability.
New analysis from Frost & Sullivan titled “GCC Industrial Water and Wastewater Treatment Chemicals Market” showed that the market earned revenues of $396.0 million in 2012 and estimates this to reach more than $568.2 million in 2017. The research covers pH conditioners, coagulants, flocculants, corrosion and scale inhibitors, biocides, and disinfectants, among other chemicals.
The focus among GCC countries to diversify into downstream industries such as refining, chemicals and petrochemicals has increased water usage as well as wastewater generation, providing significant thrust to water and wastewater treatment chemicals market.
“Tighter government regulations too will encourage companies to opt for more effective water and wastewater disposal and reuse methods, and thereby increase the demand for treatment chemicals,” noted Vishnu Sankaran, Associate Director and Head-Chemicals Practice, Middle East and North Africa, Frost & Sullivan. “For instance, the Treated Sewage.
Effluent reuse policy implemented by the Saudi Ministry of Water and Electricity serves to enforce effective water and wastewater treatment in industrial areas, in turn widening market potential.”
While participants will be buoyed by the effect of regulations on their market prospects, they will also be concerned about the control that a handful of companies have over major industries. Ultimately, this skewed balance of power pushes down prices of water treatment chemicals and curbs revenues.
Moreover, end users do not fully understand the advantages of high-quality, costlier treatment specialty chemicals and prefer to rely on regular commodity chemicals. Manufacturers too are reluctant to offer these advanced solutions as customers refrain from testing these products on a large scale fearing the loss of operational efficiency and reduced profitability.
“To achieve sustainable growth, suppliers must work hand in hand with end industries in the testing and selection of specialty chemicals that have a high performance to cost ratio,” added Sankaran. “Educating users on the long-term environmental, operational and profitability benefits of such chemicals is also a crucial part of this process, and will ensure a steady rise in overall sales.”
The GCC’s water and wastewater treatment equipment market is set to reach $2 billion by 2016, Frost & Sullivan said in an earlier report.
The market is currently being pegged at $1.3 billion but is growing at a compound annual growth rate (CAGR) of seven percent over the next five years.
As economic development gains speed, Middle East governments are moving aggressively towards promoting water conservation/storage, wastewater recycle and reuse and desalination of sea water in order to meet the burgeoning water consumption needs of all sectors, the report stated.
The region has begun investing heavily in water and sewerage networks to ensure 100 percent connectivity to the growing population, it said.
Water requirements by all the three sectors – agriculture, domestic and industrial – are set to grow from 35 billion cubic meters (BCM) to 49 BCM by 2020 in the Gulf region.
Whilethe sewage collection rate in the GCC is 52 percent of the total sewage generated however, contribution of recycled water to total water withdrawal is between four to eight percent.
The industrial growth in the GCC region is expected to unfold opportunities for advanced water and wastewater treatment solutions, according to the report. Desalination is expected to continue playing a critical role in the overall water supply in the MENA region. Across the Middle East, a total of 39 million cu. m/day of desalination capacity is expected to be added between 2010 and 2020.

GCC emerging as an attractive investment destination

jochemgeheniau — Thu, 07 Nov 2013 09:48:46 +0000

JEDDAH – “GCC offers strategic advantages, such as availability of cheap energy and feedstock supply, low tax environment, well-developed infrastructure, growing population and increasing income levels, conducive for the development of various industries in the region. All these advantages if properly showcased could attract substantial investment flows from Indian corporates, who are looking to expand their global footprints and scouting for distinctive cost advantages to remain globally competitive,” said Sameena Ahmad, Managing Director, Alpen Capital.
“The GCC is emerging as an attractive investment destination for Indian companies. We as Alpen Capital specialize in the GCC-India corridor and have concluded several transactions in this sphere. There are several opportunities that exist in the GCC for Indian companies and we see a lot of interest from Indian corporates to establish a presence in the GCC. This trend is on the rise and we will continue to work closely with our clients and the respective governments to facilitate these transactions,” said Sanjay Vig, Managing Director, Alpen Capital.
A variety of catalysts for investment growth exist in GCC. While the oil industry is undeniably a pillar for the GCC economies, the region’s priority is to achieve sustained economic growth through development of non-oil sectors. This can be achieved by increasing private sector participation, strengthening local technological capabilities, developing a skilled workforce, improving the competitiveness of exports in global markets and by attracting substantial overseas investments.
Continued government spending to boost competitiveness, self-reliance and developing local skilled work force would offer potential investment opportunities in sectors such as Petrochemicals, fertilizers, plastics, pharmaceutical, sugar refining, aluminium & steel. In addition government support and infrastructure is expected to grow in sectors such as Information & Communication technology (ICT) and agriculture, food processing, education, financial services and EPC.
GCC offers substantial cost advantage for industries like petrochemicals, fertilizers, pharmaceuticals and metallurgy among others, as the region boasts of one of the lowest energy costs globally due to abundant availability of resources. Natural gas prices in GCC range between $0.8-1.5 per million British thermal units (mmbtu) compared with the global average of $4.0-6.0 per mmbtu. The availability of low-cost feedstock provides the region with distinctive competitive advantage. Average electricity prices for end users in GCC states are much lower at $3.7cents/kWh compared to countries that enjoys the reputation of being generation powerhouses ($10.5cents/kWh in USA and $9.4cents/kWh in China).
GCC’s twin surplus condition leads to economic stability: GCC’s large fiscal surplus (averaging ~9.2 percent of GDP over 2007-11) and trade surplus (averaging ~ 16.9 percent of GDP over 2007-11), low levels of public debt (averaging ~4.5 percent of GDP over 2007-11), and low external debt translate into a better rating, in terms of macro-economic health, than developed counterparts. On the other hand, economic diversification initiatives, growth in non-hydrocarbon sectors, pegged currencies, large forex reserves, well-developed infrastructure, and a moderate inflation environment provide an overall attractive business environment vis-à-vis emerging economies.

GCC railway fully operational in 2018

jochemgeheniau — Tue, 05 Nov 2013 08:32:36 +0000

Abu Dhabi: The 2,177-km-long GCC rail network, which will link all six Gulf states by rail for the first time, providing an alternative to air or sea travel for both goods and passengers in the region, will be fully operational in 2018, said Dr Ramiz Al Assar, World Bank resident adviser of the GCC Secretariat General in Riyadh, yesterday.

“The designs of the nearly $200 billion (Dh734.490 billion) network, which will run down the Gulf coast from Kuwait, through Saudi Arabia, to the UAE and Oman, with branches linking Bahrain and Qatar, will be completed by the end of this year or in the first quarter of next year. Construction on the network is to start in 2014-15 and it will be fully operational in 2018,” Dr Al Assar told the MENA Rail and Metro Summit, being held in Abu Dhabi.

Abu Dhabi is leading the GCC rail network with its Dh40 billion Etihad Rail project. The 1,200-km line, planned to be completed in 2018, will link major industrial zones, cities and ports in the UAE, and will eventually connect with the GCC railway.

GCC transport ministers approved the feasibility study for the railway in October 2008, although a number of other key decisions have yet to be taken, including the precise route of the line.

Dr Al Assar said talks were under way between Saudi Arabia and Jordan, on the one hand, and between Kuwait and Iraq, on the other, on connecting the Arabian Mashreq (Eastern) to Maghreb (Western) networks.

“Designs of a causeway to link Bahrain to the GCC railway is expected to be approved in the third quarter of next year and there are plans to link Muscat with Yemen,” Dr Al Assar said.

Dr Al Assar said a tender for a study to set up GCC railway authority was to be issued by the first quarter of next year.

“This year has seen a turning point in the regional rail market,” says MEED editorial director Richard Thompson. “Over the past 10 months, we have seen the region’s ambitions to build Metro systems and main line rail networks start to become a reality, with more than $30 billion worth of rail construction contracts awarded so far this year And there is a lot more to come.”

More than $30 billion worth of rail construction contracts have been awarded across the region in the first three quarters of 2013, compared with just $3.9 billion worth of contracts signed in the first three quarters of 2012. The single biggest investments this year saw $22 billion worth of construction contracts awarded in June on Saudi Arabia’s Riyadh Metro.

“The success of this project so far is likely to act as a catalyst for further Metro schemes in the kingdom,” Thompson said.

The Riyadh Metro project is one of the key projects being discussed at the MENA Rail and Metro Summit 2013. Other projects under discussion include the Etihad Rail, Doha Metro and plans for an integrated GCC rail network.

The rail boom also raises challenges for the region, particularly around skills shortage and supply chain bottlenecks.

“Everybody will be competing for the same resources,” Thompson said. “And there is a real risk of unnecessary delays and cost escalation unless people manage the situation effectively. A coordinated approach is required. That is what we are aiming to achieve with this summit meeting of regional rail industry leaders.”

GCC traffic infrastructure projects at USD109b

jochemgeheniau — Thu, 26 Sep 2013 08:01:20 +0000

DUBAI – Ongoing roads and bridges developments across the GCC are currently valued at $109 billion according to the most recent figures from business advisory and research firm, Ventures Middle East.
The UAE, second worldwide for roads quality in the latest Travel and Tourism Competitiveness Report, has investments worth $58 billion in the pipeline for roads and bridges alone, while neighbor Saudi Arabia is undertaking infrastructural improvement projects valued at $77 billion that includes roads, bridges and rail.
As the host of the 2022 Football World Cup, Qatar leads the 2013 boom with an allocation of $20 billion for roads and highways, in addition to a $35 billion rail network. The combined share of roads and bridges projects in the UAE, Qatar, and Saudi Arabia meanwhile represents more than 75 percent of the total $109 billion pot.
Oman is securing $14.8 billion on roads, rail and bridges infrastructure in the coming few years, while the Kuwaiti budget for infrastructure works is estimated at $13 billion. Bahrain meanwhile also declared earlier in 2013 that it will spend more than $2.5 billion on major road, bridge, and tunnel networks. The figures signify good news for the hundreds of transport infrastructure service providers participating at the Gulf Traffic exhibition and conference, taking place on Dec. 9 to 11, 2013 at the Dubai International Convention and Exhibition Centre. Supported by Abu Dhabi Police and SAEED, the three-day event will bring together more than 100 exhibitors from 20 countries involved in the design, build, and maintenance of the region’s road, rail, parking and public transport projects.
Richard Pavitt, Exhibition Director for Gulf Traffic, said: “The Gulf region has been at the forefront of transport infrastructure developments for several years now, and 2013 marks another big year, where dozens of new projects have been announced across the six Gulf states.”
“Gulf Traffic will bring together industry leaders from across the globe involved in road, rail, public transport and parking industries. Suppliers will be able to showcase new trends and technologies offering cutting edge insights and industry solutions.”
Now in its tenth edition, Gulf Traffic focuses on the four key transport industry sectors including traffic infrastructure, parking, road safety, and Intelligent Transport Systems (ITS).
Organized by Informa Exhibitions, the region’s foremost transport infrastructure event is also supported by ITS Arab, with the Transport Research Laboratory (TRL) signing on as Knowledge Partner.
The show returns this year with the Gulf Traffic Conference, bringing together senior-level professionals and government officials presenting the latest on road and safety management trends and global implementations of ITS.

Muscat pushes on transport upgrade

jochemgeheniau — Mon, 09 Sep 2013 10:58:46 +0000

Despite a new wave of transport infrastructure schemes, Oman still lags behind neighbouring GCC states

Oman has taken significant steps towards developing its transport network, which will include a national railway and the country’s first dual four-lane motorway. But Muscat still has some catching up to do compared with the more advanced transport projects in the rest of the GCC.

The UAE is close to finishing its first phase of a national railway, while Saudi Arabia and Qatar have awarded billions of dollars-worth of construction contracts in recent months.

In contrast, Oman’s plans to build a national railway stalled midway through last year after it was decided the project would be retendered. The scheme is now gathering pace again. Consultants submitted bids for the project management contract on 26 August and earlier in the month Italy’s Italferr won the $37.3m contract for the preliminary design work.

There has also been a spate of road contracts awarded in recent weeks. In August, packages five and six of the $2.6bn, 260-kilometre Batinah Expressway scheme were both awarded. The four-lane road will connect Sohar, Muscat and the UAE and help speed up the transportation of goods from Oman’s expanding ports and airports around the region.

The Muscat government also announced plans to build a new logistics centre in the Batinah South region, designed to help support the growing traffic at Sohar Port.

The new impetus driving Oman’s transport projects will help the country realise its ambitions of becoming a major trade and transport hub for both interregional and Asia-Africa trade. However, Muscat will need to maintain, if not increase, this level of momentum to compete with the rest of the GCC effectively.