Plenty of scope for British ventures in Saudi Arabia

Updated 15 September 2015
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Plenty of scope for British ventures in Saudi Arabia

LONDON: The opportunities for doing business in Saudi Arabia were explored during a day-long conference organized by the Middle East Association (MEA) and sponsored by Saudia, Rezayat Group and British Offset in London this week.

A wide range of companies such as Saudi Aramco, SAGIA, Rolls-Royce, Areen Design, Al-Abdulkarim Holding Company, TPP, BMG Financial Group and Takaful, Prudential took part in the event.
The conference was chaired by Sir William Patey, former UK ambassador to Saudi Arabia.
Keynote speakers included Peter Meyer, CEO, Middle East Association, Tobias Ellwood MP, Minister for the Middle East, Simon Collis, British ambassador to Saudi Arabia, Nasser Almutawa Alotaibi, co-chair, Saudi British Joint Business Council, Baroness Symons, co-chair, SBJBC, Imad Al-Abdulqader, director of Investment Promotion, SAGIA, Emad El-Dukair, CEO, The Care Group, Lord Tom King, special trade envoy to Saudi Arabia, and Vic Annells, director of trade, UKTI Saudi Arabia.
The message that came out strongly from the conference was that for UK businesses to succeed in Saudi Arabia, it was necessary to take a long-term view and be prepared to establish a presence in the country.
Companies that offer training opportunities and become part of the fabric of society are looked upon most favorably.
People who fly in for a meeting on a contract by contract basis and try to conduct their affairs by e-mail from Dubai or further afield are not so well regarded.
Lord Tom King emphasized that UK companies setting up in the Kingdom should be aware of the importance of providing job opportunities to young Saudi nationals.
The country has a young and fast growing population seeking good employment prospects.
Imad Al Abdulqader, director of Investment Promotion at SAGIA, emphasized that today’s business model is one of partnerships rather than mere transactions.
He added that right now there are more than 100 projects ripe for investment and many opportunities exist within the supply chains.
“The Saudi market is still open — the time is now,” he said.
There is plenty of scope for British businesses in the health care, education, defense and security fields as well as the major infrastructure projects to which the Saudi government is firmly committed.
It was noted that with Saudi Arabia going through a period of change at the top levels of government it would be necessary for companies allow for a time of adjustment and for patience to be shown in the light of an unfolding situation.
Saudi Arabia was described as a beacon of stability in a region facing considerable turmoil.
Companies wishing to do business with Saudi Arabia were advised to act now and take advantage of the opportunities that abound across many sectors, including for SMEs.
As one speaker put it — “Do not wait for the storms to pass — enjoy dancing in the rain.”
It was pointed out that dancing in the rain was not that easy to do in the arid conditions that prevail in the Kingdom — but the general point was understood.
There was some criticism levelled at the UK by Paul Tweedale of TenBroeke Co, who as a former Head of Risk and Business Development for HSBC Rail oversaw and developed a new business in financing and owning passenger rolling stock.
He expressed a view that the UK is failing to win big infrastructure projects in Saudi Arabia because of a lack of coordination in its approach which he feels to be too timid, polite and constrained by political correctness. As he put it: “We don’t get enough of the pie.” He watches China and Germany sweep in with confident and successful proposals and said he cannot understand how a country like the UK that has fantastic projects like Crossrail underway and who used to build railways all over the world is not better showcasing what it has to offer.
His criticisms, however, were not echoed by other delegates at the conference who said in their experience the assistance offered by organizations such as UKTI is extremely useful and effective.
Presentations made by representatives from the University of Leeds, in a panel chaired by former ambassador to Saudi Arabia, Sir Alan Munro, showed the important educational links between the UK and Saudi Arabia. Within the UK Leeds attracts the third highest number of students from the Kingdom after the universities of Wolverhampton and Manchester with many studying engineering.
Khalid Al-Abdulkarim, CEO of Al AbulKarim Holding Company, pointed out that after graduation the Saudi students will take up employment in Saudi Arabia.
He thought it would be useful if British companies were to reach out to the Saudi students while they are studying the UK to offer work programs.
The focus here would not be on the pay but on the experience.
The upside for the UK companies would be that the students would gain first-hand knowledge of their company and products which can only bolster mutual business opportunities in the longer term.
On a separate issue, he spoke about how the US is very up to speed on being able to offer highly coordinated and comprehensive university systems.
He pointed out that a State like Texas, with the backing of the US government, can offer a complete university system. For countries wanting to build universities this is very attractive.
They offer the system and the experience.
In the UK, he said, things were more piecemeal with individual universities offering their particular expertise in a less coordinated way.
One of the areas where it was felt that British business could be better provided for by Saudi Arabia relates to visas.
While the US has an arrangement for five-year multiple entry visas, British business people have to make do with a six-month visa which many find inconvenient.
Concerns were also expressed over SAMA’s insurance regulations which it was felt would have been better framed under conventional terms.
Overall, the mood in the room was one of optimism with a lot of networking taking place during the breaks.
The conference which was packed full was held in the impressive Edwardian surroundings of One Great George Street in the heart of Westminster.


Russian arrests of foreign businessmen shocks Western investors

Updated 48 min 5 sec ago
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Russian arrests of foreign businessmen shocks Western investors

  • Baring Vostok's executives were arrested in a case brought with the help of the FSB security service
  • It is just the latest in a long line of cases in which top business people have been accused of crimes motivated by commercial or political interests

MOSCOW: The arrest in Russia of prominent US and French investors on suspicion of fraud has sent shockwaves through Western business circles and sparked fears of cutbacks in foreign investment sorely needed for economic growth.
The founder and employees of the Baring Vostok private equity firm were arrested on Friday in a case brought with the help of the FSB security service.
The arrest took place on the same day Russia hosted leading business people in the Black Sea resort of Sochi for a major economic forum which trumpeted the country’s openness to investment.
Michael Calvey, a US citizen and the founder and director of Baring Vostok, has been placed in pre-trial detention in a Moscow jail for the next two months for alleged fraud, along with five others — including Philippe Delpal, a French citizen.
They are accused of defrauding Vostochny Bank of at least 2.5 billion rubles ($37.7 million). All of them deny any wrongdoing and blame the case on a shareholder dispute.
In an opinion piece on Monday in the Vedomosti business daily, Maxim Bouev — vice-rector of Moscow’s New Economic School — wrote the case proves what investors have long known: “If you want to invest in Russia, you have to accept your risk of eventually being arrested and finding yourself in the dock.”
This is the latest in a long line of cases in which top business people have been accused of crimes motivated by commercial or political interests, but these have rarely involved foreigners.
Business figures and economists reacted strongly to investigators swooping on Baring Vostok, founded 25 years ago, which has brought in investments of more than $3 billion to Russia despite the geopolitical tensions and Western sanctions of recent years.
Arkady Volozh, the CEO of Russian Internet giant Yandex, defended Calvey in a statement, saying he “has always been a standard for the market of decency and law-abidingness.”
Other business leaders said they fear the case will deal a severe blow to an investment climate already marred by corruption and the lack of independent courts — especially given the strong-arm tactics employed.
“This gives Russia a hateful image abroad,” the president of the French-Russian chamber of commerce, Emmanuel Quidet, told AFP.
The chamber on Monday said it was “very concerned” about the arrests in a joint statement with the Association of European Businesses, a federation of multinational companies working in Russia.
The case could “severely damage the climate and attractiveness of Russia for direct investments from abroad,” it said.
The Kremlin sought to dispel those fears, with spokesman Dmitry Peskov saying Calvey’s arrest should “not affect the investment climate” in Russia.
He added he was aware of the contribution to the Russian economy made by Calvey, who has met President Vladimir Putin numerous times.
The government in early February unveiled a 340 billion euros ($385 billion) plan to achieve its economic goals and support growth that is forecast to slow this year. This will require major private investment.
“It’s an electric shock,” a source in the Association of European Businesses told AFP.
“You get the impression that business rivals are using the justice system and Russian (security) services to settle their scores. But the fact that the authorities are letting this happen sends out a very negative signal. You wonder who will be next.”
In the Novaya Gazeta independent newspaper, outspoken commentator Yulia Latynina claimed that in the context of current East-West tensions, “for security officials, business people are criminals and foreigners are spies.”