FII2018: Company chiefs urged to embrace technological revolution

Top CEOs at the opening ceremony of the Future Investment Initiative conference in Riyadh. (AFP)
Updated 24 October 2018

FII2018: Company chiefs urged to embrace technological revolution

  • If companies do not transform with clear strategies, they will be left behind, just like many companies that have failed

RIYADH: Company chief executives must embrace the technological revolution, delegates to the Future Investment Initiative conference were told.

Leaders need to come out of their traditional offices and engage with the community, said Yousef Al-Benyan, vice chairman and chief executive of Saudi Basic Industries Corp. (SABIC), the Saudi petrochemicals giant.

“I don’t look at it wholly from a regional point of view, but I look at it globally,” he said. “Transformation and the technology evolution are going to be very crucial. At the same time, it is going to create challenges for business.”

Companies should keep in mind that if they do not transform themselves with different platforms and clear strategies, they will be left behind, like many companies that had failed, Al-Benyan said.

“I’m not looking at incremental transformation but it has to be a complete transformation otherwise the companies will not be able to truly satisfy their shareholders.”

Al-Benayan also discussed the digital transformation that is changing the petrochemical industry, and how it will drive future growth.

The petrochemical industry is important for the growth of prosperity, Al-Benayan said. “The petrochemical industry is now everywhere in every individual’s life,” he said. 

SABIC is competitive, he said. “We have more than 21 centers globally, supported by more than 2,000 scientists and researchers to make sure that we have up-to- speed positions in our competitive environment.”  

Al-Benayan expressed concern about the future of job creation. The speed of technological innovation was greater than the speed of the transformation of Saudi Arabia’s education system, he said, which would create challenges for Saudi youth.


Saudi mall operator Arabian Centres bucks retail malaise as profits surge

Updated 21 August 2019

Saudi mall operator Arabian Centres bucks retail malaise as profits surge

  • Mall operator defies online shopping pressure by lowering discounts to tenants, boosting occupancy and rental revenues

LONDON: Arabian Centres, the Saudi mall operator which went public in May, said first-quarter consolidated net profit almost trebled to SR227 million ($60.53 million) as occupancy edged higher across its shopping centers. Revenues increased by about 2.5 percent over the year to SR572.5 million.

The results helped to propel the group’s shares 3 percent higher on Tuesday.

The group said that it boosted performance by offering lower discounts to its tenants which helped to drive rental revenues. Like-for-like occupancy across all malls increased  to 93.2 percent from 92.4 percent in the year earlier period. Finance costs fell by about 65 percent from a year earlier to SR73.9 million.

FASTFACT

 

27 - Arabian Centres plans to expand its mall portfolio to 27 within four years.

Retailers across the Middle East are coming under increased pressure as more consumers shop online, while at the same time, tourists are spending less in dollar-pegged economies because their purchasing power has been cut by the strength of the greenback. Still, in Saudi Arabia, the under-served retail market is expected to receive a boost from rising investment in the entertainment sector, especially new cinemas.

“Faced with the rising challenge of online shopping, the brick-and-mortar retail segment has sought to diversify its offering to secure its customer base, providing an increased range of leisure and entertainment facilities,” said Oxford Business Group, in a report analyzing emerging trends in the Saudi retail sector.

“The reintroduction of cinemas to the Kingdom in April last year ... is expected to increase retail footfall,” it said.

Arabian Centres, majority-owned by Fawaz Alhokair Group, listed its shares on the Tadawul stock exchange in May — the first to do so in the Kingdom under Rule 144a, allowing the sale of securities, mainly to qualified institutional buyers in the US.

The group aims to expand to 27 malls within four years.