Kingdom's nonoil exports reach SR17.4 billion

Updated 08 February 2015

Kingdom's nonoil exports reach SR17.4 billion

Saudi Arabia's trade activity showed a slight rebound in November from its lowest point in October although still below last year’s figures. Softer global demand is affecting the Kingdom’s export markets, particularly China and Singapore, while the Kingdom’s continued expenditure on mega projects expected in 2015 led to a lesser impact on imported goods, particularly in machinery and electrical equipment, according the National Commercial Bank latest Saudi Economic Review.
In value terms, nonoil exports totaled SR17.4 billion, falling short of last year by 0.3 percent, whereas by weight, nonoil exports reached 3.8 megatons, a 10.2 percent downturn.
On the other hand, the import bill in November amounted to SR50.8 billion, rising over last year by 4.6 percent. By weight, however, imports recorded 5 megatons, dwindling by 26.6 percent Y/Y, the report said.
The weakening of the euro and other major currencies against the US dollar resulted in a lower cost of importing foodstuff and base metals despite the relative rebound in commodities that took place since late September.
"By measuring the returns of nonoil exports to the cost of imports, we notice that the nonoil balance of trade gap has widened by 7.3 percent in November compared to the same period in 2013," the NCB said in its report.
Nonoil export composition remains led by plastics and chemical products which weight respectively 32 percent and 28.4 percent of the monthly total value. The high inelasticity toward the Kingdom’s production of plastics kept annualized growth figures positive, albeit by a small margin of 0.1 percent Y/Y. In contrast, exports of chemical products were impacted by the compounded effect of cheaper oil and weaker global demand, sliding by 13.5 percent Y/Y.
Exports of base metals surged by 35.5 percent on the back of edging up aluminum prices. Indonesia’s export ban on bauxite, the ore used in the production of aluminum, resulted in a negative supply shock, leading to a bid up in aluminum prices. In addition, Ras Al-Khair, the first Saudi aluminum smelter and the world’s largest, has entered the production phase, with a capacity output of 1.8 megatons of smelter-grade alumina per year.
The Kingdom’s key nonoil export markets remain the UAE, China and Singapore, with sizable declines from the latter two countries. While the UAE posted a 3.1 percent Y/Y increase in nonoil exports to SR2.7 billion, China’s imports of the Kingdom’s nonoil exports tumbled by 22.2 percent to SR2.5 billion. More so, Singapore slashed its imports of Saudi nonoil exports by 24.3 percent Y/Y.
On the import front, imports of machinery and electrical equipment, which account for around 28.5 percent of the import bill surged by 17.8 percent Y/Y to SR14.5 billion. Imports of transport equipment also marked a notable increase of 15.6 percent as they were valued at SR10 billion.
Conversely, the Kingdom’s imports of base metals were trimmed by 12.3 percent from last year, down to SR5 billion. Although soft commodities appeared to have bottomed up in September and started to climb back up, the Kingdom’s imports of food stuff fell by 24.3 percent in value terms on the back of stronger purchasing power. The main trading partners by origin of imports are China, the US, and Germany. Imports from China account for about 15.7 percent of the import bill which substantially rose by 43.4 percent to SR8 billion. On the other hand, imports from the US ticked down by 2.9 percent to SR6.8 billion, whereas German imports dwindled by 18.3 percent to SR3.2 billion.


Saudi-led group reinstated as builder of Bulgaria gas pipeline

Updated 16 September 2019

Saudi-led group reinstated as builder of Bulgaria gas pipeline

  • Bulgaria’s Supreme Administrative Court announced that the Saudi-led group’s main competitors for the project had dropped a legal challenge relating to the award
  • Bulgaria’s state gas operator Bulgartransgaz had initially chosen the Saudi-led group — made up of Saudi Arabia’s Arkad Engineering and a joint venture including Switzerland’s ABB

SOFIA: A Saudi-led consortium was definitively reinstated on Monday as the builder of a new gas pipeline through Bulgaria, intended to hook up to Gazprom’s TurkStream project.
Bulgaria’s Supreme Administrative Court announced Monday that the Saudi-led group’s main competitors for the project had dropped a legal challenge relating to the award.
The latest development brings to an end a long-running tussle between the Saudi-led consortium and its competitors for the project, a consortium of Luxembourg-based Completions Development, Italy’s Bonatti and Germany’s Max Streicher.
Bulgaria’s state gas operator Bulgartransgaz had initially chosen the Saudi-led group — made up of Saudi Arabia’s Arkad Engineering and a joint venture including Switzerland’s ABB — to build the 474-kilometer (294-mile) pipeline.
But Bulgartransgaz later decided to strike the winner off the tender for failing to supply documents needed to sign off the contract.
Instead it accepted the offer of the second-placed consortium led by Completions Development.
However, Bulgaria’s competition watchdog ruled in July that the operator should honor its previous commitments and sign a contract with the Saudi-led group.
The watchdog’s verdict was subject to a final appeal in the courts but the Supreme Administrative Court announced Monday that the appeal had been withdrawn, meaning that the Arkad-led group has now been definitively reinstated.
Bulgartransgaz is in a hurry to complete the pipeline as soon as possible in a bid to enable Russian gas giant Gazprom to hook it up to its TurkStream pipeline after it becomes operational at the end of this year.
Bulgaria, which is heavily dependent on Russian gas for its domestic needs, has been repeatedly criticized by both the EU and the United States for failing to diversify both its gas sources and its delivery routes.
The Balkan country hopes to start receiving Caspian Sea gas from Azerbaijan’s Shah Deniz field as well as liquefied natural gas from various sources via terminals in Greece through a 182-kilometer (113-mile) interconnector expected to be ready by the end of 2020.