Middle East shopping site Noon to enter China market

Noon.com currently makes deliveries to Saudi Arabia and the United Arab Emirates, the region’s largest economies. (Courtesy FAB)
Updated 13 July 2018
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Middle East shopping site Noon to enter China market

  • The $1 billion e-commerce platform is looking to build a network of brand owners in China and connect them to Middle East customers
  • CEO of Noon Faraz Khalid: We spotted a gap in the market for high-quality Chinese products

LONDON: Middle East online retailer Noon.com is expanding into Asia with plans to enter the groceries delivery sector in China during the next six months. 

The $1 billion e-commerce platform is looking to build a network of brand owners in China and connect them to Middle East customers.

“We spotted a gap in the market for high-quality Chinese products,” said Faraz Khalid, CEO of Noon.

“We want to work with the best selection of marketplace suppliers, a set of reliable, high quality sellers, to bring their inventory to customers in the Middle East,” he told Arab News.

The company has also announced plans to open two new entities in China.

“We’re looking to partner with top brand owners and marketplace platforms to help us curate a wider and more diverse assortment of products for our customers in the Middle East,” said Noon.com founder Mohammed Alabbar.

Representatives from the company have been building relationships in the Chinese market with a view to expanding logistics capabilities on the ground and acquiring office space there in the future. 

“We understand that Noon will be looking to have goods delivered by the brand holders themselves, or will have to have a number of local depots in China, which should help them boost their business further,” said Vadym Gurevych, managing director of e-commerce company Holbi Group. 

Noon’s plans to accommodate e-commerce payment methods that are already being used by the Chinese public will make purchases “easy and straightforward for Chinese customers,” he added. 

The company is working with a leading financial services provider to develop efficient and effective payment solutions.

During an interview with CNN’s John Defterios, Alabbar, who co-founded the company with Saudi Arabia’s Public Investment Fund last year, expanded on plans to reach further afield.

“I think we should not be very shy even to look a little bit east,” he said. “We should really look at Pakistan and countries like that … And I think if you were to go to North Africa, the same thing, the base is quite good in that area as well.”

The Riyadh-based company, which was was set up to provide an “Arabic-first” e-commerce platform and tap into the region’s burgeoning online retail market, competes with Dubai-based Souq.com, which was purchased by Amazon in 2017 for $650 million.

Last year Noon partnered with eBay to provide customers with access to products in a wider range of markets. 


SABIC prepares to meet investors to offer bond

Updated 9 min 54 sec ago
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SABIC prepares to meet investors to offer bond

  • The Kingdom’s petrochemical giant will be meeting investors in London, New York, Los Angeles and Boston from Sept. 25
  • SABIC has also confirmed the appointment of BNP Paribas and Citigroup as global coordinators on the sale

LONDON: Saudi Basic Industries Corp. (SABIC) is preparing to offer its dollar-denominated unsecured bond to the global market with investor meetings due to start this week.
The Kingdom’s petrochemical giant will be meeting investors in London, New York, Los Angeles and Boston from Sept. 25, according to a filing on the Saudi stock exchange on Tuesday.
The Saudi company is likely to be keen to tap into the heightened international interest in the Kingdom’s financial markets following the lifting of some restrictions on foreign investors’ activities at the start of the year.
SABIC has also confirmed the appointment of BNP Paribas and Citigroup as global coordinators on the sale, alongside HSBC Bank, Mitsubishi UFG Securities EMEA and Standard Chartered Bank acting as joint lead managers, in its Tadawul note.
The proposed issuance has been well-received so far by analysts with ratings agency Moody’s Investor Service assigning an ‘A1’ rating to the proposed senior unsecured notes to be issued by the financial vehicle, referred to as SABIC Capital II, and guaranteed by SABIC itself.
“SABIC’s A1 rating reflects its strong business position in the chemical sector and its ability to weather industry volatility, particularly given its healthy operational cash flows and conservative liquidity profile,” said Rehan Akbar, a senior analyst at Moody’s, in a note on Monday.

 

The bond is anticipated to be used in part to refinance an existing SR11.3 billion ($3 billion) one-year bridge loan raised in January this year to fund the company’s 24.99 percent stake in the Swiss chemical company Clariant, according to the Moody’s note. All regulatory requirements were completed on this acquisition earlier this month.
Cash proceeds from the bond may also be used to repay a $1 billion bond due on Oct. 3, according to Moody’s.
On Tuesday SABIC confirmed that the bond will be used mainly to refinance “outstanding financial obligations” of the company and its subsidiaries.
Analysts at rating agency S&P Global were also upbeat about SABIC’s outlook, with research published on Monday stating that the company has “strong profitability” via its KSA operations and a “strong” liquidity position.
“The debt issuance is helpful for the credit profile in the sense that it extends the company’s debt maturity profile and strengthens its liquidity position,” said Tommy Trask, corporate and infrastructure credit analyst at S&P Global.
The agency currently assigns the petrochemical firm an ‘A Minus’ rating, with a “stable outlook,” which it said reflects its “view on the sovereign as well as its expectations that SABIC will maintain high profitability under current benign industry conditions.”
S&P Global’s report said margins in the global chemical industry will “largely stabilize in 2018 following several years of improvement, attributable to the increase in commodity chemical capacity.”
However, it also warned that a key risk to credit quality is
the trend for mergers and acquisitions within the sector and the “potential negative impact on credit metrics from funding them with debt.”

FACTOID

SABIC operates in more than 50 countries across the world.