Jeddah:ABDULLATIF A. Al-Othman, Governor, SAGIA, outlined the opportunities for investors within Saudi Arabia as the Kingdom continues its “unprecedented transformation from a simple economy to a G20 country”.
Al-Othman, while relating his own experiences in London following his first visit in 1979, noted in particular the opportunities in healthcare, IT, transport, logistics, building materials, engineering and construction and the strong legal environment and attractive investment climate from which firms can benefit.
He spoke at the first Saudi-UK Investment Forum held at the Marriott Hotel, Grosvenor Square, London, and this is part of SAGIA’s efforts to attract businesses that will help to boost productivity, create high quality jobs and ensure greater prosperity for the nation through creating a strong, diversified economy.
SAGIA and Euromoney hosted an event for investors in London aiming at attracting international investment into the Kingdom’s economy by leading international businesses. London is home to many leading international businesses and the United Kingdom has particular strengths in areas such as transport, healthcare and ICT where rapid investment is planned in Saudi Arabia as the economy expands and transforms. SAGIA’s conference builds on existing strong ties between Saudi Arabia and the UK. The UK has excellent potential to play a role in bringing international expertise to Saudi as the Kingdom makes extensive investments in order to transform the economy.
Prince Mohammed Bin Nawaf, Ambassador of the Kingdom to the United Kingdom and Northern Ireland, inaugurated the conference and spoke of the close historic ties between the two countries and the need for understanding and respect, saying that “this might mean taking tea and cucumber sandwiches in London for me, and recently it meant donning Saudi robes and wielding a sword for the Prince of Wales in a traditional Ardah in Riyadh.”
He also said that it was his wish “that this forum will encourage you to come to Saudi Arabia to join us at this exciting time of growth and opportunity”. He also thanked SAGIA for its role in the conference.
Euromoney Chairman, Richard Ensor then spoke to leading British investors about their experiences of the Kingdom. Robert Gray of HSBC said: :To be successful you need to be local and international and the quality of the staff in the Kingdom enables that.” Patrick Van Daele of Shell, a long-term investor in the Kingdom. also stressed the importance of supporting the Saudi SME sector through innovative partnerships.
Dr John Sfakianakis of MASIC outlined the stability of the political and fiscal position of the Kingdom and how that underpins the nearly $400 billion investment program currently underway.
In the first session a short overview of the rail, metro, and other projects in the Kingdom, followed by a panel discussion on the opportunity and challenges of investing in this sector. The transport sector in Saudi Arabia is seeing extensive development and British businesses have the potential to bring considerable international expertise to the development of this sector for the long term.
While the sector panel debate saw a number of British businesses sharing their experience of working in Saudi Arabia Participants in the session stressed their commitment to utilizing Saudi employees and to transferring bringing their knowledge in order to leave a lasting legacy from their investment. The discussions covered the Saudi Arabian Rail Development Program, the Riyadh Metro Program (HCDR) as well as the potential role of UK companies within this development.
Alistair Dormer, Hitachi Rail Systems Business, stressed the long-term focus of its approach and the need to train a talented workforce whilst highlighting that Saudi Arabia was an ‘important area of growth’ for the company. Piers Marlow, Arriva, described Saudi Arabia as the next big thing for the company and how localization should drive the creation of an autonomous business. Likewise, Rumaih Al-Rumaih, Saudi Railway Company, stressed the importance of the Saudi Railway Polytechnic in training the next generation and outlined the opportunities across all areas of the industry, from infrastructure to operations while Nigel Ash of Network Rail Consulting outlined how both training and practical experience could be provided to Saudis through partnership with UK companies already operating in the industry.
The second panel session looked at the development of technology clusters in the United Kingdom and what Saudi Arabia could learn as its own SMEs begin to develop in the technology sector. The session explained to potential investors the aims of Saudi’s investment and the programs in place to achieve this and looked at how the UK’s experience in areas such as Tech City and its expertise in ICT could help the Kingdom in its development.
The third panel session looked at the extensive opportunities within the healthcare sector in Kingdom as large amounts of investment look to transform the Kingdom’s medical care and at how companies from the United Kingdom could be part of helping that development to succeed.
The key message was that Saudi Arabia is embarking on major expansion in healthcare and that the country is open to proposals for investment in the every field, from hospital equipment to pharmaceuticals, and is more than ready for innovation and change.
Speaking from the perspective of the government, Mohammed Alyemeni, Deputy Minister for Planning and Health Economics at the Ministry of Health, said that plans to expand the state sector, in particular building some 140 new hospitals, would amount effectively to doubling the size and operations of the Ministry of Heath, which currently runs 60 percent of the country’s healthcare services. The remaining 40 percent is split between private and other state enterprises.
Tal Hisham Nazer, chief executive of BUPA Arabia, raised the possibility that the Saudi Arabia might in time extend obligatory health insurance to the entire population. Currently insurance is only obligatory for foreign workers. Likewise, Keith Vander Kolk, chief executive of Johns Hopkins Aramco Healthcare, talked about the challenges and opportunities in running a private healthcare enterprise in Saudi Arabia, which he does on behalf of Aramco’s 350,000 employees and pensioners.
Looking at shifts in the emphasis of care, both Vander Kolk and Chris Winter, chairman of a UK National Health Enterprise Board, spoke of a goal to transform the healthcare sector from a sickness service to a preventative service, arguing that it is more profitable to prevent illness than treat it.
The final session looked at the structural set-up of the Saudi British Economic Offset Program, what it means, its role in the Kingdom’s private sector and industrial projects, the complications and challenges of this initiative and making better use of offset between the two countries. The session looked at the successes of the offset program so far and how it could be adapted and streamlined to improve its effectiveness in Saudi Arabia and to meet the country’s changing economic requirements.
Speaking from the Saudi perspective, Abdulhamid Al-Ghunaim outlined the development of offset noting that it has been successful but is on the edge of a major change. From a UK viewpoint, Grant Rogan commented that in the future the offset program would see openings in indirect and civil offset and this provided good opportunities for UK SMEs.
Sir Charles Masfield announced that within months the SBJBC Offset team would have a list of priority sectors and criteria for qualification for the program. He said SBJBC would play a very active role in promoting these to UK companies and the panel concluded on a very positive note that important developments to upgrade the profile of the offset program would be seen before the year’s end.
Co-organizer Euromoney Conferences’ regional head Richard Banks summarized the day at the close of the conference. “The success of this event is a product of the shared vision of both governments and, even more importantly, the long-term commercial relationships between the British and the Saudi private sectors,” Banks said. He added “We’re already planning a bigger event for 2015.”