Saudi and Indian companies promote new joint ventures

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Updated 11 March 2014
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Saudi and Indian companies promote new joint ventures

Crown Prince Salman, deputy premier and minister of defense, has met with a number of Indian businessmen including business tycoon M. A. Yusuffali in New Delhi.
The audience with the crown prince was followed by talks between Commerce and Industry Minister Tawfiq Al-Rabiah and his Indian counterpart Anand Sharma as well as several individual business meetings in New Delhi.
Yusuffali, chief of the Lulu Group, announced an ambitious plan to open 15 Lulu Hypermarkets in Saudi Arabia during the next two years following his meeting with Crown Prince Salman and other senior Saudi officials.
Besides the Lulu’s plans to open 42 new hypermarkets in the Middle East including 15 in Saudi Arabia, four other major agreements involving Saudi and Indian companies were signed on the sidelines of the visit.
The issue of taxation of capital gains, meanwhile, figured prominently at the India-Saudi Business Forum organized jointly by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Council of Saudi Chambers in New Delhi.
Referring to the new business deals signed by the Saudi and Indian companies, a statement from the FICCI said chairmen of Al-Qahtani Group Sheikh Abdul Aziz Al-Qahtani and Indian firm SledgeHammer Oil Tools Pradeep Mohanty signed a joint venture agreement for setting up a plant for oil drilling products in Saudi Arabia.
On the other hand, Yusuf bin Ahmed Kanoo Company and India’s Seaworld Shipping and Logistics signed a joint venture to establish a joint logistic and shipping network.
The third agreement was signed by the KRBL Limited of India and Omar Ali Balsharaf Est to supply 165,000 tons of Basmati rice to the Kingdom, while Al Rabiah & Partners and India’s Novatech had signed deal for engineering, procurement and construction (EPC) business and supply of industrial equipments to the Saudi firm.
Several other Indian and Saudi companies evinced keen interest to set up joint-ventures in other sectors on the sidelines of the visit.
Referring to the capital gains tax, which is a major hurdle in promoting Saudi investments in Commerce and Industry Minister Tawfiq Al-Rabiah said: “The issue of taxation of capital gains continues to be a major impediment in promoting Saudi investment in India, and I call on the Indian authorities to explore relaxation of this issue.”
He added: “I would also like to emphasize on the importance of the activation of the Saudi Indian Joint Fund.”
Anand Sharma, Indian minister of commerce and industry, who held talks with Al-Rabiah, commented: “India and Saudi Arabia have also agreed to work toward deeper economic engagement including through more investments, joint ventures and technology transfers.”
Both the ministers stressed on the need to transform the buyer-seller relationship, into one of deeper energy partnership with investments in petrochemical complexes, modernization of refineries, and joint ventures.
Both the ministers stressed the need to ink a free trade agreement between the Gulf Cooperation Council (GCC) countries and India for boosting trade and commercial ties.
The GCC and India have identified sectors like petroleum and oil, gas and fertilizers and information technology among other to be given focus. Sharma highlighted the need to diversify India’s export to Saudi Arabia.
The Saudi side also raised the issue of anti-dumping duty imposed on various items of their industry is detrimental for the trade relation between the two countries.
The Indian side explained that the anti-dumping duties in India are imposed after due diligence and is a quasi judicial exercise.
Sharma said India had withdrawn anti-dumping duties from two items i.e. polypropylene and pentaerythritol.
Sharma also invited Saudi investors to actively participate in the construction projects for highways, ports, airports, metros, supply chains and warehousing and power plants in India. Saudi Arabia and India have forged closer ties in trade.
In fact, the trade has grown significantly to exceed $43 billion in 2012-13.
There is need to diversify trade relations to non-oil trade sectors. Sharma said Indian globally-reputed companies, with expertise in infrastructure development are keen to work in upcoming projects in Saudi Arabia.


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 18 March 2019
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Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

LONDON: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”