Batic expands stake in Saudi smart cities firm

Batic expands stake in Saudi smart cities firm
The smart cities firm was established to create solutions for Saudi cities to be recognized based on the World Bank’s classification. (File/Shutterstock)
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Updated 14 April 2021

Batic expands stake in Saudi smart cities firm

Batic expands stake in Saudi smart cities firm
  • The move is part of Batic’s strategy to align its investment strategy with the goals of Saudi Arabia

DUBAI: Saudi investment firm Batic has signed an initial agreement to acquire 34.4 percent of of Smart Cities Solutions Company, it said in a bourse filing on Wednesday.
Batic Investment and Logistics Company signed a memorandum of understanding with Smart Parking Holding Company for the acquisition. The purchase price was not disclosed.
The move is part of Batic’s strategy to align its investment strategy with the goals of Saudi Arabia – in this case, the Kingdom’s push to create smart cities and modernize its economy, the company said.
The smart cities firm was established to create solutions for Saudi cities to be recognized based on the World Bank’s classification.
It was earlier granted with a 25-year concession agreement to build and operate smart parking solutions in Khobar, Dhahran, and Dammam.


Saudi economy set to grow much faster: Goldman Sachs

Saudi economy set to grow much faster: Goldman Sachs
Updated 16 June 2021

Saudi economy set to grow much faster: Goldman Sachs

Saudi economy set to grow much faster: Goldman Sachs
  • US investment bank says activity surging in manufacturing, finance and construction

DUBAI: US investment bank Goldman Sachs has significantly raised its expectations for Saudi Arabian growth this year and in 2022 amid soaring oil prices and rising crude output from the Kingdom.

Goldman analyst Farouk Soussa said that growth in the gross domestic product would reach 4.5 percent this year and 7 percent in 2022 — higher than most forecasts — with overall economic activity notably accelerating in manufacturing, finance and construction.

“With oil prices advancing well above $70 a barrel, we see risks to the oil sector as being significantly skewed to the upside and have increased our Saudi oil production assumptions by about 500,000 barrels a day to 10 million barrels by the end of this year, and 10.5 million on average in 2022,” Soussa said.

The new forecasts are further evidence that the Saudi economic recovery has taken off in 2021. At the start of the year, the Kingdom’s Ministry of Finance said that it expected 3.2 percent growth this year — reversing the pandemic-driven downturn of 2020. The International Monetary Fund forecast just 2.1 percent growth two months ago.

HIGHLIGHTS

• There has been a strong recovery in domestic demand by Saudi consumers, on the back of a ‘surge in gross capital formation’ after the lockdown recession.

• Private consumption broke into positive territory for the first time since the COVID-19 pandemic began.

Soussa’s optimistic projections are based on detailed figures for the first quarter of 2020 that were released by authorities.

There has been a strong recovery in domestic demand by Saudi consumers, Soussa said, on the back of a “surge in gross capital formation” after the lockdown recession, when spending was impacted. Private consumption broke into positive territory for the first time since the COVID-19 pandemic began.

The effect of slower exports — reflecting the Kingdom’s voluntary cuts in oil exports in the early part of the year — continue to be felt. “The external account remains a drag on overall growth,” Soussa said.

Some experts believe that the Kingdom could launch a big increase in oil output and export in the later part of the year as global demand recovers, especially in major economic blocs in eastern Asia, Europe and the US.


Carrefour to double Saudi store network by 2025

Carrefour to double Saudi store network by 2025
Updated 16 June 2021

Carrefour to double Saudi store network by 2025

Carrefour to double Saudi store network by 2025
  • The 9,000 square meter center in Riyadh is Majid Al Futtaim’s largest for its online Carrefour business

RIYADH: Dubai’s Majid Al Futtaim, which currently operates 21 Carrefour stores across nine cities in Saudi Arabia, plans to double its store network in the Kingdom by 2025.

Hani Weiss, CEO of Majid Al Futtaim Retail, told Arab News: “Carrefour operates different store formats, as well as multiple online offerings to meet the growing needs of its diversified customer base. It currently operates 21 stores across nine cities in Saudi Arabia. This year, Majid Al Futtaim is working toward opening six new stores in the Kingdom, including three hypermarkets and three supermarkets, and plans to double its store footprint by 2025.”

With the surge in online shopping during the coronavirus (COVID-19) pandemic, Majid Al Futtaim recorded a 285 percent rise in online sales in Saudi Arabia last year, leading the company to accelerate the expansion of its online operation in the Kingdom.

“This included opening a large online fulfilment center in Riyadh and activating nine of our customer stores to also fulfil online orders. The opening of our automated fulfilment center in Jeddah is the latest in Majid Al Futtaim’s digital transformation of its Carrefour operations,” Weiss said.

“We have accelerated our e-commerce offering as we believe this will be a key growth driver of our grocery business in Saudi as part of the complete digital and omnichannel transformation of our grocery business,” he added.

The 9,000 square meter center in Riyadh is Majid Al Futtaim’s largest for its online Carrefour business and operates 24 hours a day, seven days a week, handling up to 5,000 orders per day. 

Hani Weiss, CEO of Majid Al Futtaim Retail

More than 500 workers process the orders, which are delivered by a fleet of 150 refrigerated trucks.

Majid Al Futtaim recently launched an automated fulfilment center at its Carrefour store in Jeddah’s Al-Sulaymaniyah. The digitised storage picking facility halves the time needed to process orders. “A second center is set to open in 2022 to serve Riyadh, with a further five to seven more planned to open in the Kingdom in coming years, including in the Eastern Province,” Weiss said.

Automated fulfilment centers use artificial intelligence to pick customers’ orders, while mobile robots assist the human workers to retrieve items and maintain stock levels, he said.

As part of its expansion in Saudi Arabia, Majid Al Futtaim last month signed an agreement with global infrastructure consulting firm AECOM to help plan development of the retailer’s Mall of Saudi in Riyadh, its flagship project in the Kingdom. The mall is set to break ground in the fourth quarter of this year and will include 600 stores across 300,000 square meters of gross leasable area. At present, half the space has been reserved by retailers.

Mall of Saudi will also include the largest ski slope and snow park in the Middle East, luxury hotels, branded residences, a Carrefour hypermarket and 31 VOX Cinema screens, including the world’s largest IMAX, and a Magic Planet.

Majid Al Futtaim, which employs 43,000 people in 17 markets and operates 27 shopping malls, 13 hotels and four mixed-use communities, reported a 7 percent year-on-year fall in revenues to AED32.6 billion ($8.88 billion) in 2020, resulting in a net loss of AD2.7 billion, compared with a loss of AED1.9 billion in 2019.


PIF-backed ACWA Power raises $750m from maiden sukuk

PIF-backed ACWA Power raises $750m from maiden sukuk
Updated 16 June 2021

PIF-backed ACWA Power raises $750m from maiden sukuk

PIF-backed ACWA Power raises $750m from maiden sukuk
  • The company has announced a number of large-scale international projects in recent months

RIYADH: ACWA Power, the utility developer backed by Saudi Arabia’s Public Investment Fund (PIF), on Tuesday announced it had raised SR2.8 billion ($750 million) from its first sukuk issuance.

The sukuk will have a seven-year tenor and was 1.8 times oversubscribed, the company said in a statement. Fund managers, government funds and insurance companies accounted for about 30 percent of investors.

Paddy Padmanathan, president and CEO of ACWA Power, said: “The success of the issuance is proof of the wider market’s faith in KSA’s bond market and ACWA Power’s strong credit fundamentals, which have attracted a diverse pool of sophisticated investors.”

He said that the issuance is also “a vote of confidence from investors in our ability to capture large opportunities in Saudi Arabia and other growth markets, thanks to our de-risked and 100 percent contracted business model that is well diversified across different technologies and geographies.”

Saudi Arabia’s sovereign wealth fund, the PIF, in November last year increased its stake in ACWA Power to 50 percent from 33.6 percent.

“We believe that ACWA Power will play a significant role in both driving and diversifying economic growth in the future, while also providing enduring commercial return for the people of the kingdom,” PIF said in a statement at the time.

Riyadh-based ACWA Power in January also signed a $125 million financing deal with the Arab Petroleum Investments Corporation. The five-year Shariah-compliant corporate facility will be used by ACWA Power to develop future projects.

The company has announced a number of large-scale international projects in recent months. In December, it signed an agreement for $300 million of renewable energy projects in Azerbaijan, including the country’s first wind power facility.

In April, the company struck a deal to build a wind power plant in northwest Uzbekistan, the largest of its kind in Central Asia and one of the largest in the world.


What happened at China’s Taishan nuclear reactor?

What happened at China’s Taishan nuclear reactor?
Updated 16 June 2021

What happened at China’s Taishan nuclear reactor?

What happened at China’s Taishan nuclear reactor?
  • The plant is facing an ‘imminent radiological threat,’ Framatome warned

SHANGHAI: French energy company EDF is investigating a potential issue linked to a buildup of inert gases at its nuclear plant in China’s southeastern province of Guangdong.

The probe comes after CNN reported that the US government was assessing a report of a leak at the Taishan power station. The report was made by Framatome, the EDF business that designed the plant’s reactor and remains involved in its operations. 

Framatome warned that the plant, a joint venture with China General Nuclear Power Group (CGN) that is located around 200 kilometers from Hong Kong, was facing an “imminent radiological threat.”

Here is what we know so far.

What happened at Taishan?

According to CNN, US officials have been investigating the Framatome claims of a leak for the past week.

EDF, which has a minority stake in the plant, said a buildup of krypton and xenon — both inert gases — had affected the primary circuit of Taishan Unit 1, but added that it was a “known phenomenon, studied and provided for in the reactor operating procedures.”

Majority owner CGN also said in a statement that operations at the plant met safety rules.

Radiation levels in the vicinity were still normal on Monday, according to real-time data from the China Nuclear Safety Administration (CNSA). 

According to CNN, Framatome’s warning included an accusation that CNSA was raising acceptable radiation limits outside the Taishan plant to avoid having to shut it down. 

The regulator did not immediately respond to requests for comment. Foreign Ministry spokesman Zhao Lijian told reporters in a regular briefing the plant was fully compliant with all requirements and operating normally.

What are the risks?

Nuclear experts have generally played down the risks. CNN cited US officials as saying that the dangers to the public were currently minimal.

Li Ning, a Chinese nuclear scientist based in the United States, told Reuters that CNN was “making a mountain out of a molehill” and that it was unrealistic to expect “zero failure” in the fuel cladding of nuclear projects anywhere in the world.

Li said the media were “often unwilling to put risks into proper perspective,” which he said had effectively killed off the nuclear industry in the west.

“Coal fired power plants can emit and discharge more radioactivity than nuclear power plants,” Li said.

Why is the US govt involved?

CGN, China’s largest state-owned nuclear company, was placed on a US blacklist in Aug. 2019 for allegedly making efforts to acquire advanced US technology and material for diversion to military uses in China. 

That means that Framatome, which has operations in the United States, would need a waiver from the US government to allow it to help CGN fix technological problems, Li said.

China’s foreign ministry has said the blacklist is a misuse of export control measures.

What is Taishan’s safety records?

Minor safety issues have been quite frequent at Taishan. In March, inspectors checking a faulty voltmeter in Unit 1 accidentally caused an electrical malfunction that triggered an automatic shutdown, according to CNSA incident records. In April, a burst of radioactive gas unexpectedly entered a pipe at Unit 1’s waste gas treatment system just as workers were trying to seal it, also triggering an alarm, CNSA said.

What is an ‘EPR’?

Formerly known as a “European Pressurised Reactor,” the EPR is a “third-generation” nuclear technology that includes enhanced safety features as well as greater generation capacity.

It was designed by Framatome together with Germany’s Siemens. Its third-generation rivals now include Westinghouse’s AP1000, Russia’s VVER-1200 and China’s Hualong One. In 2006, EDF and fellow French nuclear group Areva lost a bid to build four reactors on China’s eastern coast, with China opting for Westinghouse’s model after signing a deal to transfer core technology for use in its own projects.

In 2007, EDF agreed to build two EPRs at Taishan, which would be 70 percent-owned by CGN. Construction got underway in 2010. Originally scheduled to be connected to the grid within four years, the first unit wasn’t completed until December 2018.

What next?

EDF did not provide a timeframe for completion of its investigation, nor did US officials, according to the CNN report.

Problems at the Taishan project are unlikely to dent China’s nuclear ambitions, but they underscore the challenges facing foreign reactor developers in a market increasingly dominated by domestic players.

China fell short on its 2020 nuclear capacity target. Many complained the sector’s expansion was derailed not only by the 2011 Fukushima disaster, but also by the lengthy delays and spiralling costs at foreign-designed projects.

As it steps up the construction of new plants, China is now expected to depend primarily on its own third-generation Hualong One design, but it is also helping to finance the construction of an EPR project at Britain’s Hinkley Point. 


Egypt looking to boost agricultural exports to $2.2bn

Egypt looking to boost agricultural exports to $2.2bn
Updated 16 June 2021

Egypt looking to boost agricultural exports to $2.2bn

Egypt looking to boost agricultural exports to $2.2bn
  • The country’s exports of agricultural crops declined by 2.9 percent year on year during the 2019-2020 export season to $2.16 billion

CAIRO: Egypt is aiming to grow its agricultural exports to $2.2 billion by September, the end of the current export season, according to Abdel Hamid Demerdash, head of the country’s Agricultural Export Council.

The country’s exports of agricultural crops declined by 2.9 percent year on year during the 2019-2020 export season to $2.16 billion.

Demerdash said that the sector exports to about 140 countries, including 30 new countries over the last two years.

He added that the coronavirus pandemic has made it difficult For Egyptian businesses to conduct trade visits abroad or organise business trips into Egypt that would boost the volume of exports.

Despite these problems, the sector was able to achieve growth of 1 to 2 percent compared with pre-pandemic results.

Demerdash said that Egyptian authorities will begin to register all export farms and packaging stations in accordance with a decision by the minister of agriculture.

Saudi Arabia recently ordered that Egyptian fruit and vegetable exports are to be subjected to microbiological analysis, as well as lab tests, in order to detect the potential presence of the hepatitis A virus or pesticide residues.

Once cleared, each shipment will be issued with a conformity certificate.

The agricultural chief said that Egypt reviewed the new Saudi requirements after a delegation from the Kingdom visited Egypt to be briefed on the new measures.

Demerdash added that the Kingdom is one of Egypt’s largest export markets, and measured the value of agricultural and food exports at about $540 million.