Saudi Arabia tells Farnborough air show of plans to become global defense powerhouse

Saudi Arabia’s General Authority for Military Industries inaugurated the Saudi pavilion at Farnborough International Air Show. (Hasenin Fadhel)
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Saudi Arabia’s General Authority for Military Industries inaugurated the Saudi pavilion at Farnborough International Air Show. (Hasenin Fadhel)
Saudi Arabia’s General Authority for Military Industries inaugurated the Saudi pavilion at Farnborough International Air Show. (Hasenin Fadhel)
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Saudi Arabia’s General Authority for Military Industries inaugurated the Saudi pavilion at Farnborough International Air Show. (Hasenin Fadhel)
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Updated 20 July 2022

Saudi Arabia tells Farnborough air show of plans to become global defense powerhouse

Saudi Arabia tells Farnborough air show of plans to become global defense powerhouse
  • Saudi Arabia’s key defense stakeholders are attending the Farnborough International Airshow, as the Kingdom seeks to showcase its burgeoning defense industry opportunities
  • 74 opportunities worth billions of dollars for investors, says GAMI governor

FARNBOROUGH: Saudi Arabia plans to develop its nascent defense industry into a global powerhouse with a strategic mix of domestic spending on education, research and development, and significant local and foreign investment.

This plan was outlined on Monday in a statement issued by the General Authority for Military Industries’ Governor Eng. Ahmad Al-Ohali, on the opening day of the Farnborough International Air Show in the UK, which runs until July 22. GAMI’s role is to bring together key players, covering a range of areas from manufacturing to education.

Al-Ohali opened the Kingdom’s pavilion at the show. This is the first Farnborough event since 2018 because the 2020 edition was cancelled. The industry is now recovering from the pandemic that ravaged the sector.

“As one of the world’s 20 biggest economies, the Kingdom is opening itself up to international investment and on an unprecedented scale. This has been our journey since 2017 and under the guidance of Vision 2030. It is an exciting prospect for any original equipment manufacturer or any other investor around the world to become a part of this journey of transformation,” Al-Ohali stated.

“With the localization and technology development plans, supply chain program, our human capital strategy, the World Defense Show, and many other programs, Saudi Arabia will not only expand its footprint in the global defense industry, but also become a hub for innovation in defense,” he added.

“Saudi Arabia today is an investment powerhouse and our reforms over the past several years are proof that we are ready to take all necessary measures to maintain and build on the momentum,” Al-Ohali said.

With Saudi Arabia’s goal of localizing more than 50 percent of its expenditure on defense by 2030, GAMI hopes to develop its nascent industry by collaborating with different stakeholders in the defense and security sectors.

“For example, we have identified our platforms (and) localization plans, developed a robust industrial and services supply chain program, a Military Industry Human Capital program, organized the World Defense Show, and much more. None of this would have been possible if we didn’t have the support of other government stakeholders like the Ministry of Defense and other security ministries, as well as the public and private sector players such as Saudi Arabian Military Industries, and the local and international original equipment manufacturers.”

A key to this expansion has been a supply chain program that would streamline processes in manufacturing and services. “This program has shined a light on the gaps in our local supply chain, which has translated into more than 74 investment opportunities worth billions of dollars for investors all over the world.”

The organization has determined six defense segments that present opportunities for investment, including land for manufacturing; maintenance repair and overhaul fixed wing; electronics; unmanned aerial vehicles; maintenance and repair for the navy; and production of personnel equipment.

Al-Ohali added that one of the key aspects of the program has been the establishment of the Military Industry Marketplace. MIM is a digital gateway into the defense ecosystem for investors and suppliers.

“GAMI does not only determine the investment opportunities in our localization initiatives, but we also make it easier for local and global investors to find the right opportunity and the right strategic partner for them in the Kingdom. Again, these are all key components of our effort to create a healthy, strong, sustainable ecosystem,” Al-Ohali said.

When talking about the Kingdom’s components of the local defense ecosystem, Al-Ohali said it included manufacturing, services, innovation, and education.

“These are all crucial aspects of a well-developed defense sector, but they all have one thing at their absolute core: Talented and skilled human capital. No sector can fully reach its potential without access to local talent, supported by education and training. This is why we have developed a Military Industry Human Capital strategy to make sure our greatest asset, the youth of our nation, is empowered to become the future leaders and innovators of the defense sector.

“Innovation, research and technology in the defense ecosystem is vital for sustainable localization. We are working closely with the newly established General Authority for Defense development to guide the defense technology development.”

Al-Ohali said training of young people was a key component of the strategy. “One such initiative is the National Academy of Military Industries, whereby GAMI is establishing an independent academy to train, upskill, and enable the national personnel that will ultimately help us realize our localization goals.”

Meanwhile, in other developments at the show, the European airplane manufacturer Airbus and several airlines said on Monday they had signed letters of intent to buy carbon removal credits to offset the emissions from air travel.

Airbus was joined by Air Canada, Air France-KLM, EasyJet, International Airlines Group, LATAM Airlines Group, Lufthansa Group and Virgin Atlantic, who have committed to engage in “negotiations on the possible pre-purchase of verified and durable carbon removal credits starting in 2025.”

In further news, General Electric Chief Executive Larry Culp said on Monday a new “GE Aerospace” brand for its aviation business pointed to a “wider strategic aperture” that could eventually lead to the industrial giant entering new businesses.

Asked at the Farnborough Airshow if that meant a greater appetite for acquisitions as the conglomerate prepares to split into three, Culp said any changes would be “first and foremost organic, and then and only then inorganic opportunities.”

Also at the show on Monday, the head of Qatar Airways said an “epidemic” of home working has contributed to staff shortages that are being widely blamed for travel disruption in Europe this summer.

The aviation sector is struggling to secure staff needed to cope with a post-pandemic surge in air travel, prompting London’s Heathrow Airport to impose curbs on capacity to avoid delays, in a move that led to tensions with Dubai’s Emirates.

In opening the show earlier in the day, outgoing Prime Minister Boris Johnson talked about the economy and alluded to his exit from Downing Street. “This government believes in aviation and its power to bring jobs and growth to the entire country.”

“After three years in the cockpit ... I am now handing over the controls seamlessly to someone else. I don’t know who,” he added, sparking laughter from delegates.

(With Agencies)


OPEC+ may consider output cut of more than 1 million bpd

OPEC+ may consider output cut of more than 1 million bpd
Updated 02 October 2022

OPEC+ may consider output cut of more than 1 million bpd

OPEC+ may consider output cut of more than 1 million bpd
  • The figure is slightly above estimates for a cut given last week

RIYADH:  The Organization of the Petroleum Exporting Countries and its allies led by Russia, also known as OPEC+, will consider an oil output cut of more than a million barrels per day when it meets on Oct. 5, OPEC sources told Reuters on Sunday.

The figure is slightly above estimates for a cut given last week, which ranged between 500,000 bpd and 1 million bpd.

OPEC+ is meeting in person in Vienna for the first time since March 2020. “It is a meeting that is taking place at a very interesting global time,” one of the sources said.

The output cuts are being considered on the back of a slide in oil prices from multiyear highs reached in March and market volatility. Saudi Arabia first flagged the possibility of cuts to correct the market in August.

Earlier this week, a source familiar with Russian thinking said Moscow could suggest a cut of up to 1 million bpd, while an OPEC source put the likely figure closer to 500,000 bpd. Talks are expected to continue ahead of the meeting.

FASTFACTS

OPEC+ is meeting in person in Vienna for the first time since March 2020.

Saudi Arabia first flagged the possibility of cuts to correct the market in August.

The output cuts are being considered on the back of a slide in oil prices from multiyear highs reached in March and market volatility.

India cuts tax

The Indian government has cut a windfall tax on domestically produced crude oil to 8,000 ($97.99) rupees per ton from 10,500 rupees per ton from Sunday, after a decline in global oil prices.

India has also scrapped an export tax on jet fuel and halved export duties on diesel to 5 rupees per liter from Sunday, a government notification said.

NNPC transaction

Nigeria’s state-owned oil company NNPC Ltd. has bought the marketing business of unlisted OVH Energy, giving it access to 380 fuel stations in Africa’s largest oil producer and Togo, among other assets, the two companies said on Saturday.

OVH Energy Marketing, the owner and operator of Oando branded retail service stations, said the outlets would be rebranded NNPC and full integration is expected by the end of 2023.

The deal also gives NNPC access to eight liquefied petroleum gas plants, three aviation depots and 12 warehouses.

NNPC, which became a commercial entity in July, already owns more than 500 fuel stations across Nigeria and said it would be ready for an initial public offering by mid-next year.


Saudi real GDP expected to rise by nearly 8 percent, say analysts

Saudi real GDP expected to rise by nearly 8 percent, say analysts
Updated 02 October 2022

Saudi real GDP expected to rise by nearly 8 percent, say analysts

Saudi real GDP expected to rise by nearly 8 percent, say analysts
  • Inflation is predicted to be 2.6 percent and 2.1 percent in 2022 and 2023 respectively: Al Rajhi Capital

RIYADH: Saudi Arabia’s budgeted revenues for 2023 are likely to be based on the Brent price at $76 per barrel, said Al Rajhi Capital in its assessment of the Kingdom’s budget figures.  

“For 2023, we believe oil revenues could reach SR754 billion ($200.7 billion) and non-oil revenue at SR417 billion,” said the head of research at Al Rajhi Capital Mazen Al Sudairi.

“Based on our assessment, the government’s 2023 budgeted revenues are likely based on an assumption of brent at around $76 a barrel.” 

Real gross domestic product growth is forecast to increase by nearly 8 percent year-on-year in 2022 and 3.1 percent year-on-year in 2023, according to Al-Rajhi Capital.

Inflation is expected to be 2.6 percent and 2.1 percent in 2022 and 2023 respectively, Al-Rajhi said.

Revised 2022 revenues are mostly in line with estimates, however, the expenditure budget is much higher than from an earlier announcement, it said.

The Kingdom’s Finance Ministry’s preliminary budget statement projected spending to reach SR1.11 trillion next year, with revenue of SR1.12 trillion. 

The 2023 spending budget was raised by 18 percent, with a slight fiscal surplus of SR9 billion expected for 2023.

The world’s largest oil exporter is expected to balance the books in the coming year, having emerged with a quickly developing balance sheet due to the rebound in crude. 

Saudi officials expressed intention to change the heavy reliance on petrodollars and “decouple” the Kingdom’s spending from oil volatility as it puts the country’s economy at the mercy of uncertainty in the oil market. 

Its budget surplus was recorded at SR78 billion in the second quarter of 2022, an almost 50 percent rise from the same time last year. 

Its revenue reached SR370.4 billion whereas expenditure totaled SR292.5 billion in the second quarter of this year, according to the ministry. 

The ministry’s estimates showed that oil revenue stood at SR250.4 billion, signaling an 89 percent year-on-year rise in the second quarter. 

However, the Kingdom’s non-oil revenues only rose by 3 percent to SR120 billion in the second quarter. 

Domestic debt reached SR604.8 billion at the end of June, up from SR558.8 billion in the previous half, showed the ministry data. 

The Finance Ministry’s data showed that the Kingdom’s external debt fell from SR379.3 billion to SR361.8 billion in the same period. 

The objectives of the state’s general budget for the fiscal year 2023 come as a continuation of the process of work to strengthen and develop the financial position of the Kingdom, Finance Minister Mohammed Al-Jadaan said.

“The government attaches great importance to enhancing the support and social protection system and accelerating the pace of strategic spending on Vision (2030) programs and major projects to support economic growth,” Al-Jadaan added.

The Kingdom’s economy has demonstrated its strength and durability by achieving high growth rates, after taking many policies and measures with the aim of protecting the economy from the repercussions of inflation and supply chain challenges, the minister said.


Abu Dhabi Chamber of Commerce forms new board for businesswomen council

Abu Dhabi Chamber of Commerce forms new board for businesswomen council
Updated 02 October 2022

Abu Dhabi Chamber of Commerce forms new board for businesswomen council

Abu Dhabi Chamber of Commerce forms new board for businesswomen council
  • Council enables female entrepreneurs to capitalize on business opportunities

ABU DHABI: The Board of Directors of the Abu Dhabi Chamber of Commerce and Industry has formed a new board for the Abu Dhabi Businesswomen Council, Emirates News Agency reported.

The new board’s mission is to help female entrepreneurs improve their skills, introduce them to relevant laws and policies, and teach them how to take advantage of local and federal government initiatives.

It is part of the chamber’s efforts to help businesswomen and female entrepreneurs in Abu Dhabi contribute to the emirate’s economic growth.

The ADBWC board, chaired by Asma Al-Fahim, is made up of Abu Dhabi Chamber board members as well as successful Abu Dhabi businesswomen such as Nour Al-Tamimi, Dr. Khadija Al-Ameri, Marwa Al-Mansoori and Shaikha Al-Nowais.

“Over the past 50 years, the UAE has placed women’s empowerment amongst its top priorities and supported the Emirati woman to be a key partner in building the UAE,” Al-Fahim said.

She added: “The support of H.H. Sheikha Fatima bint Mubarak, chairwoman of the General Women’s Union, president of the Supreme Council for Motherhood and Childhood, supreme chairwoman of the Family Development Foundation and honorary chairwoman of the ADBWC, played a huge role in women’s development in all fields, especially entrepreneurship. Thanks to H.H. Sheikha Fatima, the Emirati woman is now equipped with all the factors of success to occupy her proper place regionally and internationally.”

Al-Fahim added that the ADBWC is eager to increase communication with businesswomen in Abu Dhabi in order to keep them up to date on the latest economic changes.

Furthermore, Al-Fahim said that the council will launch new initiatives and programs to support the business environment, giving female entrepreneurs the necessary tools to capitalize on business opportunities locally, regionally and internationally.


Saudi Mouwasat completes $27m acquisition of 51% of Jeddah Doctors Co.

Saudi Mouwasat completes $27m acquisition of 51% of Jeddah Doctors Co.
Updated 02 October 2022

Saudi Mouwasat completes $27m acquisition of 51% of Jeddah Doctors Co.

Saudi Mouwasat completes $27m acquisition of 51% of Jeddah Doctors Co.

RIYADH: Saudi healthcare provider Mouwasat Medical Services Co. said that it has completed the acquisition of 51 percent of Jeddah Doctors Co. in a deal worth SR102 million ($27 million).

The financial impact of this acquisition is expected to appear in the third quarter of 2022, according to a bourse filing.

Jeddah Doctors Co. is a Saudi closed joint stock company that owns a hospital presently under construction in Jeddah called Jeddah Doctors Hospital.


TASI in green as recession concerns ease: Closing bell

TASI in green as recession concerns ease: Closing bell
Updated 02 October 2022

TASI in green as recession concerns ease: Closing bell

TASI in green as recession concerns ease: Closing bell

RIYADH: The Saudi main index ticked up in its first trading session of October as investor recession fears subsided.

The Tadawul All Share Index ended  0.72 percent higher to reach 11,487; the parallel market Nomu edged 0.34 percent higher to 19,939.

Saudi oil giant Aramco ended with a 0.28 percent decline, while Rabigh Refining and Petrochemical Co. edged up 1.31 percent.

The Saudi National Bank, the Kingdom’s largest lender, fell 0.63 percent, while Saudi British Bank increased by 2.43 percent.

The Kingdom’s most valued bank Al Rajhi gained 1.48 percent, while Alinma Bank gained 1.93 percent.

Saudi Paper Manufacturing Co. decreased by 0.19 percent, after it signed SR166 million ($44 million) agreement with Italy-based Toscotec for a raw tissue paper roll production line.

Retal Urban Development Co. dropped 0.28 percent, after its shareholders approved a cash dividend of SR2 per share for the first half of 2022.

Tihama Advertising and Public Relations Co. declined 1.61 percent to lead the fallers, after the company and UK-based WPP postponed their merger agreement until Oct. 31, 2022.

Middle East Healthcare Co. led the pack of gainers with an increase of 9.93 percent.