1st phase of Aramco’s industrial city to be completed in 2021

Saudi Energy Minister, Khalid Al-Falih
Updated 17 July 2017
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1st phase of Aramco’s industrial city to be completed in 2021

RIYADH: Saudi Energy Minister Khalid Al-Falih said the newly approved industrial energy city project will help localize industries supportive to the energy sector.
He said the decision to establish a new energy city aligns with the Vision 2030 and supports vital infrastructure in the Kingdom.
In a statement issued late on Saturday, Saudi Aramco said that the first phase of the energy city would be completed in 2021.
The city, which will be developed over 50 square kilometers of land allocated for energy-related industries, will complete its first phase that covers almost 12 square kilometers by that date.
The Cabinet approved a proposal put forward by Saudi Aramco for the establishment of a company in the Eastern Province to undertake infrastructure development for the industrial energy city and another company to operate and maintain the city. The new project will generate thousands of direct and indirect jobs and annually add SR22.5 billion ($6 billion) to the Kingdom’s gross domestic product (GDP).
Amin Nasser, chief executive of Saudi Aramco, said the new energy city would be a milestone in efforts to localize industries and services related to energy.
The city will create an ideal and integrated environment to attract global investments; establish and develop a large number of small- and medium- enterprises (SMEs); and stimulate innovation and entrepreneurship, the Aramco chief executive said.
The city will be located between Dammam and Al-Ahsa, at the heart of energy operations. Ghawar, the world’s largest onshore oil field is near Al-Ahsa.
The Saudi Industrial Property Authority (MODON), which develops industrial cities in Saudi Arabia, has started to chalk out plans and programs with Saudi Aramco to develop and operate the city, the statement added.
Khalid Al-Salim, acting director-general of MODON, said the management of the new energy city will be jointly carried out by Saudi Aramco and Modon.
The project will support Saudi Aramco’s operations, will cut costs of products and services, and meet the needs of the oil giant’s operations, the statement said.
It will also provide drilling, exploration, production services and pipe manufacturing.
Saudi Arabia is trying to lower dependence on oil and establish new industries to expedite job creation for a rapidly rising young population.
It plans to list in stock markets up to 5 percent of its shares in Aramco, which will help it invest in other sectors to generate more revenue streams.
— With input from Reuters


Online fashion retailer Boohoo’s sales almost double

Updated 1 min 29 sec ago
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Online fashion retailer Boohoo’s sales almost double

LONDON: British online fast-fashion retailer Boohoo beat forecasts with a 40 percent jump in annual profit and an almost doubling of revenue as its mainly younger customers snapped up its budget-friendly designs.
The company, which imitates the latest fashions and sells them at “pocket money” prices to mainly twentysomethings, said it had made a strong start to this year, sending its shares as much as 18 percent higher.
Its robust performance and that of bigger online peer ASOS highlights how the Internet is reshaping the British retail landscape and the clothing sector in particular.
“Against a backdrop of difficult trading in the UK clothing sector, the group continued to perform well, gaining market share in the expanding online sector,” said joint chief executives Mahmud Kamani and Carol Kane.
Founded in Manchester, northern England, in 2006, Boohoo has expanded rapidly, purchasing the PrettyLittleThing and Nasty Gal brands at the beginning of last year.
The pure Internet players are bucking a challenging backdrop for UK consumers, outflanking and taking market share from traditional rivals burdened with big store estates.
Last week the 240-year old Debenhams department store chain reported a 52 percent slump in first-half profit and warned on the full-year outlook for the second time in four months.
In stark contrast, Boohoo raised sales and profit guidance four times in 2017-18.
The company made a pretax profit of £43.3 million pounds in the year to February 28, up from £30.9 million a year earlier and topping the £39.4 million expected by analysts, according to Reuters data. Revenue soared 97 percent to £579.8 million, ahead of company guidance.
The stock has come off from 273 pence in June last year, on concerns profit growth will be held back by a step-up in investment.
However, Boohoo said on Wednesday it could invest more in systems, technology, warehouses, distribution and marketing, while still delivering substantial sales and profit growth.
Capital expenditure in 2018-19 would be £50 million- £60 million. Revenue growth was forecast at 35-40 percent, with a profit (EBITDA) margin of 9-10 percent.
Looking beyond 2018-19 it forecast sales growth of “at least” 25 percent, whilst maintaining a 10 percent EBITDA margin.
“Critically, fears of a ‘margin reset’ have not been realized,” said analysts at Peel Hunt, reiterating their “buy” recommendation.
“Changes to distribution plans means the next move is likely to be overseas,” they said.