Pioneering Saudi farm techniques bear fruit

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Updated 23 September 2013
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Pioneering Saudi farm techniques bear fruit

Saudi Arabia has unveiled a new vision for agriculture through collaboration, which aims to deliver food security, environmental sustainability and economic opportunity.
This new vision, which stresses the need to produce more food with fewer resources and reinvigorating rural economies, was unveiled by Agriculture Minister Fahd Balghunaim to coincide with National Day celebrations..
Balghonaim, who gave an overview of the agricultural production in the Kingdom, called on leaders of business, farmers and development partners “to work together” to achieve sustainable agricultural growth.
“Saudi Arabia would like to be an effective element in increasing agricultural productivity,” said the minister, while asserting that the Kingdom would like to be an effective element in the world to increase agrarian production by improving agricultural productivity at the domestic front.
He maintained that “there are many alternatives to fulfill the domestic requirement and the ministry is working out several plans to cover the market demand.”
The minister, however, expressed concern that the Kingdom so far had not achieved self-sufficiency in poultry and vegetable segment.
“What has been achieved is only sufficiency in eggs supplies,” he said.
Saudi Arabia produces 42 percent of domestic poultry consumption and 85 percent of the vegetables consumption, Balghonaim said.
He said: “There is no shortage in vegetables, despite the political issues in Syria as we have almost achieved self-sufficiency in this field and for remaining 15 percent of the market demand, there are many alternatives to cover up the requirement.”
He said: “There is a new trend of farming in the greenhouses for the production of larger quantities of vegetables.”
Moreover, we encourage the private sector for investment in agriculture,” he added.
Referring to a shortage for tomatoes the market, he said: “We want Morocco to export tomatoes to the Kingdom to meet the shortfall in the domestic market.”
Saudi Arabia signed two deals worth SR560 million recently to build a wheat silo and a flour mill at Jazan Port to raise its storage capacity to more than three million tons of wheat from around two million tons in two years, enough to cover its annual consumption, according to the minister.
The new Jazan silo will have a capacity of 120,000 tons of wheat.
Balghonaim, who also heads the country’s state-run Grain Silos and Flour Mills Organization (GSFMO), said the second contract was to build a mill with the capacity to process 600 tons of wheat a day.
Both projects will be completed soon.
In October, Waleed El-Khereiji, director general of GSFMO said various projects were already under way to add 710,000 tons of wheat storage capacity.
Saudi Arabia plans to import more wheat this year following an increase in consumption and a planned decrease in local purchases.
The Kingdom abandoned plans for self-sufficiency in wheat in 2008 and aims to be 100 percent reliant on imports by 2016 in order to save water, said Balghonaim, adding that the country has the advantages in terms of financial experience, agricultural management.
Moreover, it maintains good relations with almost all countries to meet its agrarian requirements, the minister said.
Referring to the growth of agriculture sector and its positive impact on economy, he said Saudi Arabia’s agriculture and food sectors are expected to sustain a combined annual growth of 18.5 percent, driven by a rising population and strong consumer spending.
Food sales in the Kingdom account for around half of the domestic retail market and are expected to be worth almost $70 billion by 2016.
According to a report, Saudi Arabia’s food consumption is expected to grow by 4.2 percent between 2011 and 2015, driven by factors such as rising income levels, population growth, lifestyle shifts, and a thriving domestic economy.
The Saudi government has already allocated around $15 billion for the agricultural sector this year for projects and initiatives aimed at meeting demand.
The Saudi government is also encouraging more rapport and collaboration between the public and private sectors to ensure food security in the Kingdom, which ranks as the Middle East’s largest individual food importer and the largest market in the region for agro-food products and technologies.
The Ministry of Agriculture is heavily involved in the agriculture industry as the ministry is primarily responsible for the agricultural policies in the nation.
The private sector has been playing a major role as the Saudi government offers long-term interest free loans, along with low-cost water, fuel, electricity and duty-free imports of raw materials and machinery.
While Saudi Arabia is also the region’s largest food producer, representing 74.1 percent of total production in the GCC, it imports more than $14.2 billion worth of food and beverage products each year to meet its consumption demands.
According to BMI’s recent Q1 2013 report, this will rise to $35.2 billion by 2020.
Analysts also predict the country’s changing dietary pattern from carbohydrate-rich to protein-rich and high-value food products will create new opportunities for food companies in the Kingdom.
In order to address the growing food demands from consumers, the Saudi government plans to inject $22.1 billion into its food security initiative, said the report.
The move is aimed at reducing the country’s dependence on food imports as well as provide employment for up to 46,000 people.
A young and growing population coupled by a thriving domestic economy is changing food consumption habits, creating significant opportunities for importers and exporters. Hence, the Kingdom and its agencies have taken several initiatives to boost agriculture production, including dairy and poultry production.
The state-owned Agricultural Development Fund has launched a seven-point initiative that will change the whole face of Saudi Arabia’s agricultural sector.
The plan is now ready for implementation. It includes establishing agricultural information center, water conservation in irrigation except for wheat and fodder, establishing an entity or more for handling and marketing vegetables and fruit and another for fish, cooperative insurance for livestock sector starting with poultry, dates marketing, and cattle breeding company.
The main objective behind the launch of these initiatives is to keep up with local, regional and international variables in agriculture sector.
He pointed out that the staff in charge conducted a study on the market situation where they understood all viewpoints of related parties to the market and discussed solutions to the problems experienced by the Kingdom markets.
Among recommendations and proposals that will be included in the new initiatives, is creation of markets for farmers.
In fact, the Saudi government has been trying and supporting farmers to be more productive for the last several decades.
The government mobilized substantial financial resources to support the raising of crops and livestock during the 1970s and 1980s.
The main institutions involved were the Ministry of Agriculture and Water, the Saudi Arabian Agricultural Bank (SAAB) and the GSFMO.
SAAB provided interest-free loans to farmers in 1989 — for example, 26.6 percent of loans were for well drilling and casing, 23 percent for agricultural projects, and the balance for the purchase of farm machinery, pumps, and irrigation equipment.
SAAB also provided subsidies for buying other capital inputs.
GSFMO implemented the official procurement program, purchasing locally produced wheat and barley at guaranteed prices for domestic sales and exports.
The procurement price was steadily reduced during the 1980s because of massive overproduction and for budgetary reasons, but it was substantially higher than international prices.
By the late 1980s, the procurement price for wheat, for example, was three times the international price.
On the top of this, agricultural and water authorities provided massive subsidies in the form of low-cost desalinated water, and electric companies were required to supply power at reduced charges. The program prompted a huge response from the private sector, with average annual growth rates well above those programmed.
These growth rates were underpinned by a rapid increase in land brought under cultivation and agricultural production.


Misk program gives a boost to young Saudis who mean business

Misk Innovation and 500 Startups help accelerate innovation and entrepreneurism by bringing Silicon Valley growth techniques to young regional companies, helping them scale and fundraise by imparting knowledge. (Supplied photo)
Updated 19 March 2019
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Misk program gives a boost to young Saudis who mean business

  • The first batch includes 19 start-ups from across the region, specializing in various fields
  • The platform allows businesses to access quality candidates through a matching algorithm

DUBAI: Young Arabs are taking the region’s offline markets online, from fitness and recruitment to car repairs and chalet hire. 

Nineteen start-ups have been chosen so far to take part in the Misk 500 MENA Accelerator Program.

Anwaar Alrefae, a 26-year-old Kuwaiti, is one of them, with her Project 5 Miles (P5M) health and fitness app. 

Anwaar Alrefae of P5M

“We help people get fit and support them in staying fit,” she said. 

“What’s important for the community in the region is family, friends and work, and because fitness isn’t an integral part of these pillars in people’s lives, when things get stressful, the first thing to drop is a healthy lifestyle because it’s not an integral part of their lives.” 

Launched last year, the app’s name stems from pushing through the hardest first 5 miles. 

“In those first 5 miles, it’s a new experience and you’re trying to discover what works for you and what doesn’t,” Alrefae said. 

“Once you push through them, you know what works for you and how to fit it into your life, and it’s easier for you to get active.”

Her objective is to combine fitness and socializing, as her app allows members to book classes in multiple gyms with friends and family. 

“It allows people to be social in an active way, and it’s less likely for them to drop being active because they can be social with friends and family while being active, which brings in the element of entertainment,” she said. 

“The practice of anything is finding a routine without boredom, so by being able to find that flexibility in such activities, people won’t get bored. 

“It’s human nature, and we want to keep people on their toes and engaged.”

Having grown up in Kuwait and studied in Boston, Alrefae hopes to dispel the misconception that the region is generally “lazy,” being extremely active herself. 

“By adding this physical component to people’s lives, they’ll really be able to have a sense of independence and confidence, and set a goal and achieve it ... Besides the health aspect, it will also have a huge mental effect.”

Mohamed Ibrahim, a Sudanese who was raised in Riyadh, is one of Alrefae’s classmates in the Misk program. 

Mohamed Ibrahim of Sabbar

He created Sabbar earlier this year as a recruitment solution that focuses on jobs in the retail and service industry. 

It provides businesses in Saudi Arabia with a platform that automates their recruitment process, halving their recruitment time and cost. 

It also offers potential workers a mobile app that allows them to find nearby jobs.

The start-up is timely, with a recent labor law in the Kingdom pushing businesses to hire more Saudis. 

“It’s a unique offering where we find jobs in a geographical way,” Ibrahim said. 

Sabbar helps Saudis find nearby jobs in the retail and service industry, while also helping automate businesses’ recruitment process. (Supplied photo)

“There’s no platform for Saudis to find retail jobs, like baristas or cashiers, so this helps businesses in their challenge today to hire faster and easier.”

The platform allows businesses to access quality candidates through a matching algorithm built on jobseekers’ personality and desire, and to ensure that potential hires are retained longer.

“There’s a high turnover in Saudi Arabia in this (retail and service) industry — up to 70 percent — compared to the global average of 24 percent,” he said. 

“You have businesses today that are struggling to meet the demand of filling vacancies quickly due to the hire turnover, and there’s a struggle to grow because of it, so when the labor law came out I saw retailers go through a lot of challenges, so it’s a niche market I can definitely grow.”

Abdullah Shamlan of Speero

For Abdullah Shamlan, a 29-year-old Yemeni who was born and raised in Riyadh, the Misk program has provided him with invaluable mentorship to grow his business Speero. 

“You learn from the best, and the quality of the network of founders you’re exposed to is great,” he said. 

“It’s the largest in the MENA (Middle East and North Africa) region, which definitely helps.”

Speero is an online marketplace that helps businesses and individuals find spare parts for cars in a more convenient way. 

“We connect spare-parts stores with customers. It helps organize some complicated industries, like spare parts,” Shamlan said.

“There’s no single solution that tells you about spare-parts prices and their validation in the market, so we’re doing the tough job for the government on the ground.”

With more than 8,000 suppliers in the Kingdom, Speero has started helping 150 of them manage their inventory while providing almost instant quotations to customers on the search, before delivering the parts to their doorstep. 

“We serve more than 5,000 people in Saudi Arabia, and we’re taking a totally offline market online,” Shamlan said. 

“There’s a need for this because it’s a daily struggle, and we already crossed $1 million in sales in less than 18 months.”

Renting chalets in the Kingdom is another practice that has been made easier, thanks to Latifah Altamimi, a 30-year-old Saudi from Riyadh who created GatherN in November 2016. 

“It’s a platform that helps people search and book chalets in Saudi Arabia,” she said. 

“We also help chalet owners list their properties and manage them, so it’s like a combination of a Saudi Airbnb and Booking.com.”

Latifah Altaimi of GatherN

The start-up stemmed from Altamimi’s own experience as a regular customer, spending every weekend in a chalet in Riyadh for social and family gatherings. 

In one year alone, the app’s customer base grew 500 percent.  

“There’s demand for it. We have more than 6.2 million transactions every year in this market, but 99.99 percent are done manually, for walk-in customers or calling the reception of the (chalet),” she said. 

“It’s a concept developed in Saudi Arabia, with more than 100,000 resorts in the Kingdom. 

“We now have more than 1,000 chalets, with huge room for improvement.” 

Altamimi said the Misk program has been extremely beneficial, adding: “We already know a lot, but there’s a huge difference between knowing and doing. It’s a great opportunity to expand, and we’re working on our growth. We already grew 40 percent in the seven weeks we’ve been with them (the program).” 

One of the challenges she is working on is converting her leads into bookings. 

“We now have more than 15 employees, 8 percent of whom are Saudis, and we’re planning to reach 25 employees,” she said. 

“I was an employee for seven years and I’m a proactive person. I like to try different things and experiment. I worked in an international company where I didn’t have the space to be creative and do more than what I was expected to, so having my own company gives me huge space to experiment, be creative and contribute to the country’s economy.”

The Misk program began on Jan. 27, 2019.

It will conclude with a demo day on May 13 in Riyadh.