Saudi Arabia’s Alsalam Aerospace set to double turnover, mulls long-term IPO

The Alsalam Aerospace Industries stand at the Dubai Airshow. (AN photo)
Updated 15 November 2017
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Saudi Arabia’s Alsalam Aerospace set to double turnover, mulls long-term IPO

DUBAI: Saudi Arabia’s Alsalam Aerospace Industries aims to double turnover within two years and could consider becoming a public company.
The Riyadh-based outfit that repairs, maintains and overhauls aircraft, has formed an alliance with other aerospace industries in the Kingdom, said CEO Yahya Homoud Al-Ghoraibi in an interview on the sidelines of the Dubai Airshow.
Such an approach mirrors a similar recent consolidation of aerospace and defense-focused companies in the UAE, as both countries seek to add high-value aviation jobs in line with economic diversification plans aimed at creating more private sector employment for citizens.
The company currently generates revenues in the range SR1 billion ($266 million) to SR1.2 billion. But that is expected to grow to about SR2 billion by 2019, said Al-Ghoraibi.
He said a public listing could be considered over the next five years.
“With the new vision, a lot of projects are coming to Alsalam and we are working hand-in-hand with some of the other offset companies to form an industrial alliance,” he said.
Alsalam is one of a group of Saudi aviation groups that have signed an initial agreement to form an alliance to undertake manufacturing of aircraft parts as well as maintenance work.
The move was announced by TAQNIA Aeronautics on Monday. Other companies in the alliance include Middle East Propulsion, Advanced Electronics, Advanced Arabian Simulation, Saudia Aerospace Engineering Industries, Aircraft Accessories and Components and Saudi Rotorcraft Support.
Based next to King Khalid International Airport in Riyadh, Alsalam employs about 2,600 people — almost 60 percent of whom are Saudis.
Its corporate brochure shows a picture of the Douglas DC-3 plane that was gifted by President Roosevelt to King Abdul Aziz in 1945 — marking the birth of civil aviation in the country.
The company was established in 1988 as an “offsets” program, aimed at encouraging knowledge transfer from foreign companies winning big contracts in the country to local joint ventures.
Other Gulf states have developed their own offsets programs to attract more inward investment and the economic visions of both Saudi Arabia and the UAE identify aviation as a key focus.
The offset system prioritizes Saudi-origin products and stipulates that a proportion of the technical or services component of contracts are awarded locally.
But the acceleration of economic reforms in the Kingdom is putting even more pressure on foreign corporations hoping to win work in Saudi Arabia to demonstrate that they are helping to transfer skills, create jobs and build capacity.
BAE Systems, the world’s third-largest defense company, highlighted the importance of that process in winning work in the Kingdom.
“This is all driven by Vision 2030,” said Guy Griffiths, BAE Systems’ international managing director during the company’s first-half earnings webcast in August.
“In every negotiation that’s conducted, whether with us or other defense suppliers, a key component beyond the price and specifications of the product is what is the industrial, training, development and technology transfer contribution that goes with this order? It’s probably the most preeminent part of every negotiation,” he said.
Frost & Sullivan expects that the Saudi military offsets market will grow at an annual rate of 3.9 percent to reach $62.6 billion by 2021.


Unaoil’s former Iraq partner pleads guilty to bribery

Updated 19 July 2019
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Unaoil’s former Iraq partner pleads guilty to bribery

  • It is the first guilty plea to result from a three-year investigation by the Serious Fraud Office into suspected bribery and money laundering
  • Unaoil is a Monaco-based oil and gas firm

LONDON: The former partner in Iraq for Unaoil, a Monaco-based oil and gas consultancy, has pleaded guilty to five counts of bribery in the first conviction in a three-year criminal investigation by Britain’s Serious Fraud Office (SFO).
Basil Al Jarah, 70, pleaded guilty on July 15 to conspiring to give corrupt payments in connection with the award of contracts to supply and install single point moorings and oil pipelines in southern Iraq, the SFO said.
Al Jarah’s conviction, which comes six months before three other defendants in the case face a criminal trial in London, was announced after a judge lifted reporting restrictions in a pre-trial hearing on Friday, the SFO said.
Ziad Akle, Unaoil’s former territory manager for Iraq and Stephen Whiteley and Paul Bond, who worked for Dutch-based oil and gas services company SBM (Offshore), have pleaded not guilty.
Akle, 44, has been charged with three offenses of conspiracy to make corrupt payments. Bond, a 67-year-old former senior sales manager with SBM (Offshore), and Whiteley, a 64-year-old former vice president of SBM (Offshore) and one-time Unaoil general territories manager for Iraq, Kazakhstan and Angola, each face two counts.
Sam Healey, a lawyer at JMW Solicitors who is representing Whiteley, said his client “strenuously denied” all alleged offenses.
“Mr Whiteley co-operated fully with the SFO as they opened their enquiries and will rigorously defend the charges,” he said.
Lawyers for Al Jarah and Bond declined to comment. A lawyer for Akle was not immediately available for comment.
A spokeswoman for Unaoil declined to comment, while SBM Offshore has said it is company policy to not comment on past or current employees.