how to navigate saudi arabia’s€¦ · impacting gdp, employment, sme contribution and...

Eng. Fuad Mosa – Vice President, SABIC Local Content and Business Development Unit

GPCA Supply Chain Conference

Wednesday, 17/04/2019

HOW TO NAVIGATE SAUDI ARABIA’SLOGISTICS OPPORTUNITY WHILE MAXIMIZING LOCAL CONTENT

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Classification: Internal Use

VISION 2030 COMPRISES THREE PILLARS WITH THE UNDERLYING OBJECTIVE OF DEVELOPING THE LOCAL MARKET

A vibrant society… A thriving economy…An ambitious nation…

Localization Targets and Clear Stakeholder Mandate

KSA has put in place bold localization targets through Vision 2030, with a mandate to enable

them

Strategic Long Term Local Market Creation

Creating a local market provides sectors with offtake security, risk reduction and

potential for higher revenues and savings in the long term

Participation of Large Companies Key to Success

Historically localization and local market creation programs have required

participation of large companies as executors to ensure success

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How to navigate across Saudi Arabia's new business ecosystem while maximizing Local Content CONFIDENTIAL

THE HUB CONNECTING 3 CONTINENTS

KSA has chosen to focus on developing local manufacturing capacity and adopting the latest supply chain technologies to ensure it becomes a global leader

Raw Materials

Production Capacity

Export Capacity

Supply ChainManufacturing

Capacity

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THESE OBJECTIVES TRANSLATE INTO WELL-DEFINED TARGETSIMPACTING GDP, EMPLOYMENT, SME CONTRIBUTION AND LOCALIZATION

KINGDOM of SAUDI ARABIA’S (KSA) VISION 2030 – OBJECTIVES AND TARGETS

IncreasePrivate Sector contribution

to GDP

~2,200 Bn SAR

additional GDP from private sector

Increase SME Contribution to

GDP

~1,250 Bn SAR

additional GDPfrom SMEs

Decrease Unemployment

Rate

~2.3 Mn

new jobs required

Increase Export Contribution to

Non-oil GDP

~1,350 Bn SAR

increase in non-oil exports

Increase Localization in

O&G Sector

~60 Bn SAR

increase in O&G local procurement

2015 40% 20% 11.6% 16% 40%

2030 65% 35% 7% 50% 75%

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VISION REALIZATION PROGRAMS HAVE BEEN DESIGNED TO TRANSLATE THE VISION INTO ACTIONS AND MEASURABLE OUTCOMES

Public Investment Fund

Vision Realization Programs

VRPs underpin the implementation of The Vision by defining clear targets, action plans, KPIs and a leadership – execution infrastructure

Focus of presentation

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THE NIDLP PROGRAM AIMS TO TRANSFORM THE KINGDOM INTO A LEADING INDUSTRIAL POWERHOUSE IN FOUR PROMISING GROWTH SECTORS

Sector Focus

Aspirations of NIDLP

Transformation of the KSA01Into a leading industries powerhouse and a

global logistics hub in promising growth sectors

02

Job CreationGenerate major job opportunities for Saudi citizens

03TradingImprove KSA trade balances

04Local ContentMaximize local content

Source: NIDLP

Logistics

03

04

02

01Industry

Energy

Mining

Focus of presentation

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Source: NIDLP

LOGISTICS STRATEGY AIMS TO TURN KSA INTO A LOGISTIC HUB BY DEVELOPING KSA AS A EXPORT & REGIONAL PLATFORM, AND IMPROVING CONNECTIVITY

Transforming KSA Into a Logistics Hub

Promoting Ease / Possibility of Living Across KSA

Enhancing Financial Sustainability

Improving Public Entity Performance

Logistics Sector Strategy Dimensions Logistic Hub – Key Components

Regional Platform (For Re-Exportation)

Transform KSA into a regional distribution hub in GCC and East Africa that offers lower prices and higher speed than competitors

Local and Internal ConnectivityUse highly branched distribution system that allows distributing goods and inputs at optimal cost across current and target population centerswith development plans

Export Platform

Position KSA as an efficient export platform that can set correct estimations and provide capacity and capabilities required to avoid wastage, in order to support overall national industrial diversification strategy

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KSA NEEDS TO INVEST IN KEY ENABLERS AND LATEST TECHNOLOGY TRENDS TO OUTPERFORM ITS REGIONAL PEERS AS A LOGISTIC HUB

Source: NIDLP

Expanded T&L Capacity

Expand the capacity of key T&L assets in order to remove bottlenecks and stimulate growth of cargo and passenger transport

Digitized and streamlined operations

Streamline, digitize and automate logistics and border procedures in order to reduce freight time and cost

Improved Governance & Regulations

Improve sector governance and regulations and promote the participation of the private sector in order to increase logistics and transport level

Key Enablers Key Sector Technology Trends

Use of Big Data to Analyze Passenger Flow

Eco-Friendly and

Autonomous Vehicles

Automation and allocation of berth management in the maritime sector

Use of Ultra High-Speed

Transportation

Real-time tracking of goods and people at

airports

To become a pioneering logistics hub, KSA needs to outperform its peers in freight speed, cost and services

(e.g., 5 day reduction in export time vs 7 days in 2016)

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Source: NIDLP

NIDLP HAS ALREADY HIGHLIGHTED SEVERAL INVESTMENT OPPORTUNITIES IN LOGISTICS SECTOR, IN PARTNERSHIP WITH KEY STAKEHOLDERS…

Establishment of a Wheel

Manufacturing Plant for Trains

for local and regional demand

Establishment of a Plant for Packing and

Winding Traction Motors

Intermodal Yard

Operation for general and cargo rails

Car/Wagon Manufacturing/

Assembly

Concession to Operate and

Maintain metro lines

and its related facilities (e.g., Mashaaer al

Mouqaddassa)

Cargo Handling

Services in King AbdulazizInternational

Airport (KAIA)

Develop and Operate

Logistics Zone Close to Major

Sea Ports

Op

po

rtu

nit

yP

rom

ote

r

NON-EXHAUSTIVE

Example Logistics Sector Opportunities in KSA

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… AND OFFERS AN ATTRACTIVE VALUE PROPOSITION TO INVESTORS

Infrastructure

R&D and Innovation

Export Enablement

Talent

Funding

Regulations and Doing Business

National transport strategy and integrated masterplan to ensure alignment and integration of logistics projects

Intensified public spending in RDI activities in NIDLP sector creating positive externalities for industrial investors

Industry 4.0Industry 4.0 enablement package, including loans, industry 4.0 capability centers, model factories, telecom infrastructure, etc.

• Export enablement package, including new export financing solutions such as EXIM bank and streamlined export procedures

• Export promotion of products manufactures locally

Access to academia, facilities, and equipment to support development of human capital

Access to loans up to 75% of the capital invested, at more competitive rates for strategic investments

Financial IncentivesFinancial support tailored to the different players (e.g., 3PL) in the logistics sectors

• Flexible national PPP regulatory framework• International standards for aviation safety

and security• Improved safety of railway system

Source: NIDLP

NIDLP - Value Proposition to Investors

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NUSANEDTM IS SABIC’S FLAGSHIP HOLISTIC LC PROGRAM TO SUPPORT VISION 2030 LOCAL CONTENT AGENDA

An Opportunity Gate program to reach out, receive and analyze investor opportunities

SABIC Support Packages (e.g., product offering , tech. support and shared services ) to enable investor opportunities

Enable Financing for attractive opportunities through NUSANED Investment, SABIC’s partners, and shareholding investment arms

Develop Workforce Capabilities to enable investor opportunities

MUAHAL

D

Access to Finance

C

DAEM

B

ENTEMA

A

Stakeholder Engagement: Partner or seek endorsement with relevant KSA authorities/agencies

NUSANED Investment™SABIC local content and business development company

12CONFIDENTIAL


NUSANED INCLUDES A GOVERNANCE TO CATALYZE LOCAL CONTENT AND

UNIFY NATIONAL EFFORTS

The Head of NAMMA

The GovernorThe Governor

Deputy Minister of Labor

Deputy Minister For Companies Affairs

CEO

NUSANED Executive Committee

Unifying the national efforts and intensive coordination between the public and private sectors

Catalyzing the local content for future targeted sectors by National Industrial Strategy

Three scheduled meetings yearly

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WE COLLABORATE WITH A LARGE SYSTEM OF LOCAL CONTENT PARTNERS TO ACHIEVE THE SUCCESS OF NUSANED

National Champions

EnablingEcosystem

TrainingInstitutions

Financing Agencies

Policy Making

• Analyze current and future

workforce trends to identify gaps

and future needs

• Joint participation in local and

international conferences,

exhibitions and workshops

• …

• Changes in policies, criteria and

implementation plans where relevant

• Facilitate issuance of permits/licenses

• …

• Contribution to collaborative initiatives

• Share market data, information and opportunities

• …

• Sponsor entrepreneurs

• Training for local workforce

• …

• Enabling investors’ funding

• …

Source: SABIC

THANK YOU

how to navigate saudi arabia’s€¦ · impacting gdp, employment, sme contribution and...

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