JEDDAH, 21 September 2006 — Saudi Post is set to become a holding company and is moving forward in its privatization process with potential for profitable investments, according to the President of Saudi Post Dr. Mohammed Bantan.

Bantan gave a presentation yesterday at the Jeddah Chamber of Commerce and Industry on the steps taken so far in creating a practical and feasible system of delivering mail in Saudi Arabia and consequently making Saudi Post a viable business.

It is no secret that people in Saudi Arabia have a problem in the sending and receiving of mail in the Kingdom due to the lack of home and street addresses. Most Saudis depend on mailboxes that can be rented at post offices. Now Saudi Post has succeeded in creating a mailing system based on a grid system of numbers. Bantan explained the process being followed to create a zip code based postal system on which mail would be delivered to a person’s residence or office, the service is called Wasel. “The house and street address is based on numbers and not names, that way the machines can scan and sort the mail,” he said. He then talked about restructuring Saudi Post to become a holding company with shareholders. Saudi Post was divided into nine sectors, some to become independent companies as subsidiaries: distribution, transportation, advertisement mail, front offices, financial offices, property administration, premium mail, technical and network services, and maintenance.

In trying to find the optimal distribution system, Saudi Post found an efficient company with an established system and decided to purchase it. After negotiations with relevant ministries and the board of directors, an agreement was reached and the company was officially registered. “A royal decree is expected next week for establishing the distribution company Naqel,” said Dr. Bantan. Saudi Post will own the majority of shares but the company will be managed by the private sector. 22 companies made bids and now they are in the final negotiations with two of them to be chosen as strategic partners.

Another potential profit maker in the company are advertisements, which are almost non-existent. “Around the world, mail advertisements constitute 40 percent of the profits. Here newspapers distribute the ads and brochures. In a year we currently make only SR1 million,” said Bantan. There is also the service of delivering bills and bank statements and other such regular mail. “We asked for investors and strategic partners and we chose two strategic partners. We are in the implementation stage of establishing Shaher Company,” he said.

Bantan also spoke about approaching the different private post offices and suggesting they form one company. “They began in this project to establish a corporation. We will be their partner and they manage the offices as a service point,” he said. There is also the project for a company that will invest in and administer the properties of Saudi Post thus relieving it from the operation and maintenance expenses and instead it will rent the space it needs in these properties.

Another potential investment is premium mail. “Premium mail is the money maker. We have restructured it and introduced new services such as same-day delivery, next-day delivery, insured mail, tracking to the address, tracking by Internet in addition to such things as changing address and holding mail,” said Bantan. Another is the financial service. “Money transfers are huge in Saudi Arabia but this is not an easy project but we began and in the process of providing it through our offices using a special card,” he said.

At the end of his presentation, he assured the businessmen in attendance that the post is an investment project worth considering. “We agreed with a strategic consulting company to draw the strategic plan for it,” he said.