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”
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.