Majid Al Futtaim boss: ‘We’ll be everywhere’ in Saudi cinema expansion

Speaking on the sidelines of the annual World Economic Forum in Davos, Alain Bejjani, chief executive of Dubai-based Majid Al Futtaim (MAF), unveiled the latest stages of a $4 billion investment plan. (Social Media)
Updated 24 January 2019

Majid Al Futtaim boss: ‘We’ll be everywhere’ in Saudi cinema expansion

  • Alain Bejjani gives details of multibillion-dollar investment plan
  • In discussions with producers to help ‘lay ground for viable movie industry’

DAVOS: A leading foreign investor in Saudi Arabia signaled his confidence in the Kingdom’s economy and investment prospects with a multibillion-dollar expansion program and a rollout of innovations in leisure and retail.

Speaking on the sidelines of the annual World Economic Forum in Davos, Alain Bejjani, chief executive of Dubai-based Majid Al Futtaim (MAF), unveiled the latest stages of a $4 billion investment plan.

This includes the first Vox cinema in Jeddah — part of a rollout that will see 300 new screens in the Kingdom within 18 months — and a plan to introduce Saudi-only workforces in the Carrefour chain of supermarkets that MAF operates in the country.

“What Saudi Arabia has gone through in the past three years is unparalleled. It has a great story to tell. It’s a country dealing with its issues, and these won’t derail what’s happening,” Beijani said.

The Vox cinema will open in the Red Sea Mall later this month with 12 screens, of which three will be “gold” luxury venues, complementing existing Vox screens in the capital’s Riyadh Park. A further three locations will be opened elsewhere in the Kingdom in March.

“We promised we’d be everywhere in Saudi Arabia, and we’re keeping our promise,” Bejjani said.

MAF has been at the forefront of opening leisure facilities in the Kingdom, in support of the aims of the Vision 2030 strategy to reform the economic and social environment.

“The Saudi government and its people will see fast that the reforms have a reality in their everyday lives,” Bejjani added.

“What’s important is that people come up with great ideas. We’re helping lay the ground for a viable movie industry”

Alain Bejjani

He also revealed that MAF, as the leading cinema operator in the Kingdom, is considering plans to get more involved in the film-production side of the movie industry, and is in discussions with Saudi producers.

“What’s important is that people come up with great ideas. We’re helping lay the ground for a viable movie industry,” he said.

Another part of Vision 2030 is to increase employment opportunities for Saudis in the private sector, and MAF’s plan to increase the proportion of Saudis employed in its Carrefour chain is a further example.

Stores in Madinah and Al-Jouf in the northwest already have 100 percent Saudi workforces, and Bejjani said the scheme will be rolled out across the rest of its 18-strong chain.

“It requires a big commitment in training, but Carrefour believes in a culture of merit. It will take more effort and it will have a cost, but you have to be serious about the plans to make any difference,” he added.

Bejjani was at Davos for bilateral meetings, and to take part in panel discussions on subjects ranging from the strategic outlook for the Middle East to the “experience economy,” in which consumers pay for unique leisure experiences rather than physical goods.

He backed calls by Saudi policymakers for closer integration and trade relations between the UAE and the Kingdom, a structure that he hoped could spread to the rest of the Middle East.

“I believe the region needs more frictionless trade — more harmonization of norms in business,” he said.

“Trade flows, mobility, payments and free movement of people are all areas where we could benefit from closer integration.”

But he stopped short of calling for a common currency, partly because the fact that many regional currencies are pegged to the US dollar means they are already closely connected.

“Maybe ideally we’d have a common currency, but that’s quite a sophisticated thing and there are complications to that,” he said.

The Middle East would benefit greatly from greater economic integration, and could rival big trading blocs such as the EU, he added.

“If we want to really drive growth in the Arab world, we have to have scale. The total market of the region is 500 million people, but the individual economies are comparatively small,” he said.

“The reason American startups are so successful, for example, is that they can do business across the whole country.”

Bejjani called for a reduction in regulation in the Middle East, both within and between economies.

“The Arab market can do better by doing less. There are historic reasons for the regulation and some legacy issues, but the relationship between Saudi Arabia and the UAE is a fantastic model,” he said.

MAF is behind some of the biggest retail, leisure and tourism ventures in the UAE, and Bejjani said the Emirati economy is “very strong.”

He added: “There have been challenges driven by negative consumer sentiment, but these have been acknowledged by everyone. There’s a great commitment in Dubai and Abu Dhabi to overcome these.”

Consumer sentiment has balanced out and will move back into positive territory early this year, he said.

Gulf defense spending ‘to top $110bn by 2023’

Updated 51 min 3 sec ago

Gulf defense spending ‘to top $110bn by 2023’

  • Saudi Arabia and UAE initiatives ‘driving forward industrial defense capabilities’
  • Budgets are increasing as countries pursue modernization of equipment and expansion of their current capabilities

LONDON: Defense spending by Gulf Arab states is expected to rise to more than $110 billion by 2023, driven partly by localized military initiatives by Saudi Arabia and the UAE, a report has found.

Budgets are increasing as countries pursue the modernization of equipment and expansion of their current capabilities, according to a report by analytics firm Jane’s by IHS Markit.

Military expenditure in the Gulf will increase from $82.33 billion in 2013 to an estimated $103.01 billion in 2019, and is forecast to continue trending upward to $110.86 billion in 2023.

“Falling energy revenues between 2014 and 2016 led to some major procurement projects being delayed as governments reigned in budget deficits,” said Charles Forrester, senior defense industry analyst at Jane’s.

“However, defense was generally protected from the worst of the spending cuts due to regional security concerns and budgets are now growing again.”

Major deals in the region have included Eurofighter Typhoon purchases by countries including Saudi Arabia and Kuwait.

Saudi Arabia is also looking to “localize” 50 percent of total government military spending in the Kingdom by 2030, and in 2017 announced the launch of the state-owned military industrial company Saudi Arabia Military Industries.

Forrester said such moves will boost the ability for Gulf countries to start exporting, rather than purely importing defense equipment.

“Within the defense sector, the establishment of Saudi Arabia Military Industries (SAMI) in 2017 and consolidation of the UAE’s defense industrial base through the creation of Emirates Defense Industries Company (EDIC) in 2014 have helped consolidate and drive forward industrial defense capabilities,” he said.

“This has happened as the countries focus on improving the quality of the defense technological work packages they undertake through offset, as well as increasing their ability to begin exporting defense equipment.”

Regional countries are also considering the use of “disruptive technologies” such as artificial intelligence in defense, Forrester said.

Meanwhile, it emerged on Friday that worldwide outlays on weapons and defense rose 1.8 percent to more than $1.67 trillion in 2018.

The US was responsible for almost half that increase, according to “The Military Balance” report released at the Munich Security Conference and quoted by Reuters.

Western powers were concerned about Russia’s upgrades of air bases and air defense systems in Crimea, the report said, but added that “China perhaps represents even more of a challenge, as it introduces yet more advanced military systems and is engaged in a strategy to improve its forces’ ability to operate at distance from the homeland.”