Hewlett Packard has signed an agreement with SNAS Trading and Contracting Co. to build and manage a plant for the assembly of PCs in Saudi Arabia. Construction of the Riyadh facility will begin in July. The first PCs from the plant should start appearing in the local market in the fall.
Two existing HP partners — Nahil Distribution and Jeraisy Computer Communications Services (JCCS) — have initially been identified to distribute PCs from the plant within the Kingdom, while Aptec will distribute around the Middle East. HP plans to consider engaging more partners depending on the scope of individual projects and opportunities developing in the Middle East.
“Since our announcement six months ago that HP intended to set up this facility in the Kingdom, we have been busy finalizing all of the details relating to this highly significant venture in the Middle East,” said Christoph Schell, general manager, personal systems group, HP ME. “Our announcement today means that we are well positioned to move forward quickly in establishing the plant, and growing the PC market in the Kingdom. SNAS has an excellent track record working with international companies in the Kingdom. We believe that this experience, together with their excellent logistics facilities and their financial strength, makes them an ideal fit for HP on this particular venture.”
The plant is expected to produce around 80,000 PCs per annum to be sold in the Kingdom and across the Middle East region. HP believes that the new plant, in addition to supporting the local Saudi economy, will result in product coming to market more quickly. Turnaround time is expected to be halved, from the existing 30 days from order to delivery, down to 15 days. The plant also is expected to provide improved response on support and offer customers a wide portfolio of HP products.
“Since the majority of the employees within the plant will be Saudi nationals, we see this as a significant move by both HP and SNAS in driving Saudization,” said Bassam Mahmoud Jabr, general manager, SNAS. “We are looking to put in place a strong core team at the plant whose skills we will develop together with HP on an ongoing basis. Given the enormous opportunities that we believe are available throughout the region for this plant, we will seek to grow this team significantly.”
HP will be responsible for providing components, system integration and knowledge transfer as well as all arrangements surrounding HP branding. SNAS will be responsible for the manufacturing process, quality certification and the establishment and maintenance of the legal entity under Saudi regulations. “We see the establishment of this plant as crucial in helping us to address the particular needs of small to medium businesses in the Kingdom and around the region,” said Schell. “The new facility is designed to complement our existing, extensive portfolio of products and to help us grow the PC market in the region.” (M.B.Y.I.)