Kingdom executes $300bn worth of projects defying regional recession

The presentation organized by the German-Saudi Arabian Liaison Office for Economic Affairs (GESALO) in Riyadh.
Updated 28 September 2016

Kingdom executes $300bn worth of projects defying regional recession

RIYADH: Defying the global and regional trends of recession, Saudi Arabia is currently executing projects worth $300 billion, said Fahad Mohammed Al-Hammady, chairman of the National Committee for Contractors at the Council of Saudi Chambers (CSC).
The Saudi government is also supporting several projects, while it is reviewing a large number of projects also.
“Whatever the case may be, a better future for construction section is anticipated,” said Al-Hammady, while speaking at a presentation organized by the German-Saudi Arabian Liaison Office for Economic Affairs (GESALO) in Riyadh.
The event was organized in cooperation with the CSC and the Germany’s Messe Munchen to introduce the world’s leading trade fair for architecture, materials and systems called ‘BAU Trade Fair’.
This trade fair, to be attended by a large number of Saudi exhibitors and visitors, will be held in the German city of Munich from Jan. 16 to 21.
A German delegation led by Mirko Arend, deputy director of Germany-based Messe Munchen and Oliver Oehms, Gesalo delegate, made the presentation.
Mark Pey, the newly-appointed general manager for Lufthansa, spoke about the airline’s services.
Referring to the current situation of the construction and contracting sector, Al-Hammady said that “the situation will become better in near future.”
Al-Hammady said that he looks forward for cooperation between the Kingdom and Germany in construction sector within the framework of the Saudi Vision 2030.
Despite the regional economic recession, the spending on projects are still continuing in the Gulf states including the Kingdom, he added.
In fact, the GCC’s construction community should expect that the construction business will bounce back in 2017.
This view has also been supported by Ben Hughes, director of capital projects at Deloitte Middle East, according to a report.
Hughes also noted that the region is tracking comparatively well with the relatively buoyant US economy.
“Clearly, there’s been a slowdown of project awards across the Gulf, and that’s a result of governments undertaking spending reviews,” Hughes has been quoted as saying.
In his presentation, Arend also spoke about the construction sector in his country, and made comparison between the Kingdom and Germany.

German BAU fair

Oehms, on his part, also gave details of the German BAU fair that will present “practice-oriented innovations and interdisciplinary solutions for commercial and residential construction and interior work for both new-buildings and renovation.”
Referring to Lufthansa operations on Saudi-German sector, Mark said: “Lufthansa German Airlines operates 24 weekly flights from Saudi Arabia providing a seamless connection between the key cities of the Kingdom and the airline’s hubs in Frankfurt and Munich.”
With these convenient connections, Lufthansa continues its long standing tradition of facilitating the closest of ties between the business communities of Germany and Saudi Arabia, he added.
Operating from Frankfurt and Munich, Europe’s most punctual hubs, Lufthansa offers business and leisure travelers from the Kingdom a global network with over 200 destinations in 76 countries.
Passengers from the Kingdom will find seamless connections throughout the Lufthansa network including those to the US and Canada with 20 destinations offered from Frankfurt, making Lufthansa the leader in linking the Middle East with the North Atlantic’s most important financial centers.

Indonesia’s Go-Jek close to profits in all segments

Updated 18 August 2018

Indonesia’s Go-Jek close to profits in all segments

  • Go-Jek is Indonesia's first billio-dollar startup
  • Ride haling app evolves into online payment platform

JAKARTA: Go-Jek, Indonesia’s first billion-dollar startup, is “extremely close” to achieving profitability in all its segments, except transportation, its founder and CEO Nadiem Makarim told Reuters.

Launched in 2011 in Jakarta, Go-Jek — a play on the local word for motorbike taxis — has evolved from a ride-hailing service to a one-stop app allowing clients in Southeast Asia’s largest economy to make online payments and order everything from food, groceries to massages.

“We’re seeing enormous online to offline traction for all of our businesses and are close to being profitable, outside of transportation,” said the 34-year old CEO.
The startup is expected to be fully profitable “probably” within the next few years, Makarim added.

Already a market leader in Indonesia, where it processes more than 100 million transactions for its 20-25 million monthly users, Go-Jek is now looking to expand in Southeast Asia.

Ride hailing services in Southeast Asia are expected to surge to $20.1 billion in gross merchandise value by 2025 from $5.1 billion in 2017, according to a Google-Temasek report.

Go-Jek said in May it would invest $500 million to enter Vietnam, Singapore, Thailand and the Philippines, after Uber struck a deal to sell its Southeast Asian operations to Grab — the bigger player in the region.

Go-Jek is seeing strong funding interest from its backers as it targets an aggressive expansion, Makarim said.

“Since its Aug. 1 launch, the app has already grabbed 15 percent of market share in Ho Chi Minh,” Makarim said. The firm this week opened recruitment for motorcycle drivers in Thailand.

The startup expects anti-monopoly concerns swirling around the Grab-Uber deal, which Singapore said had substantially hurt competition, to help clear a path for its expansion.

“We’re bringing back choice. The Singapore government is particularly eager to bring back competition,” Makarim said, adding that the order of overseas rollouts had not been set.

Go-Jek’s offshore push comes at a time when Singapore-based Grab is stepping up funding to expand in Indonesia and transform itself into a consumer technology company, starting with a partnership with online grocer HappyFresh.

“Mimicking Go-Jek’s strategy is the highest form of flattery,” laughed Makarim.

Grab told Reuters in a statement, “The super app strategy has been around for a while now and no Southeast Asian player can claim to have pioneered it.” The company also said Grab has not lost market share in Ho Chi Minh since August, but declined to provide market share data.

Makarim believes Go-Jek’s understanding of food merchants will give it an edge over Grab, which counts investors such as Chinese ride-hailing firm Didi Chuxing and Japan’s SoftBank Group Corp. among its backers.

Makarim, who sees food delivery as Go-Jek’s core business, said he was not concerned about funding, without giving details.

Go-Jek was reported in June as being in talks to raise $1.5 billion in a new funding round and was valued at about $5 billion in a prior fundraising, sources have told Reuters. The firm had said in March it was considering a domestic IPO.

Makarim noted Go-Jek’s backers were sharing both capital and expertise. The company is collaborating with Alphabet Inc’s Google on platform mobility, Tencent on payments strategy, on logistics operations, and Meituan Dianping on merchant transactions and deliveries.

Go-Jek has set up a venture capital arm, Go-Ventures, to invest in startups in Southeast Asia “with strategic importance to our business,” the CEO said.