Saudi Arabia to launch regional center for Chinese factories as trade relations deepen

Saudi Arabia to launch regional center for Chinese factories as trade relations deepen
Saudi Minister of Energy Prince Abdulaziz bin Salman reaffirmed that Saudi Arabia will continue to be China's reliable partner in the energy sector. (File/AFP)
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Updated 08 December 2022

Saudi Arabia to launch regional center for Chinese factories as trade relations deepen

Saudi Arabia to launch regional center for Chinese factories as trade relations deepen

RIYADH: Saudi Arabia will host a regional center for Chinese factories as the Kingdom's strategic location among the three continents of Asia, Africa and Europe is set to elevate the trade relationship between both countries in the energy supply chain, confirmed Saudi Minister of Energy Prince Abdulaziz bin Salman.  

He reaffirmed that Saudi Arabia will continue to be China's reliable partner in the energy sector, and added that the Kingdom is always keen to maintain stability in the oil market, reported Saudi Press Agency. 

Not just the energy sector, Prince Abdulaziz further added that Saudi Arabia has strong and close strategic relations with China in various other fields.  

Highlighting that China is the top destination for Saudi Arabia's oil imports, he said the volume of trade between the countries has been increasing steadily over the past five years.  

The energy minister also reviewed areas of cooperation where both China and Saudi Arabia can work together. This includes projects to convert crude oil into petrochemicals, renewable energy, clean hydrogen, electricity projects and peaceful uses of nuclear energy.   

He also assured collaboration in China's Belt and Road Initiative, as well as investment in integrated refining and petrochemical complexes in both countries.  

The comments from the energy minister come while Chinese president Xi Jinping is in the Kingdom for three days to attend multiple summits including the Saudi-Chinese Summit, the Riyadh Gulf-China Summit for Cooperation and Development, and the Riyadh Arab-China Summit for Cooperation and Development.  

Xi's visit to Saudi Arabia is expected to further strengthen the trade relationship between the two countries as well as the Middle East as Beijing is looking to increase its influence in the region.   

It should be also noted that the Kingdom was the biggest recipient of Chinese investments in the Arab World between 2005 and 2020, accounting for more than 20.3 percent of the total regional investments, worth $196.9 billion, SPA reported. 

It added that both countries are expected to sign more than 20 initial agreements worth over SR110 billion ($29.3 billion) during Xi's visit. They are also expected to enter into a strategic partnership deal to harmonize the implementation of the Kingdom's Vision 2030 and economic diversification project with China’s Belt and Road Initiative.  


Saudi-based AJA Pharma and the UAE’s Bioventure agree deal to license and supply new pharmaceuticals

Saudi-based AJA Pharma and the UAE’s Bioventure agree deal to license and supply new pharmaceuticals
Updated 13 sec ago

Saudi-based AJA Pharma and the UAE’s Bioventure agree deal to license and supply new pharmaceuticals

Saudi-based AJA Pharma and the UAE’s Bioventure agree deal to license and supply new pharmaceuticals

RIYADH: Saudi-based AJA Pharma has signed a Memorandum of Understanding with UAE’s Bioventure FZ-LLC to license and supply new pharmaceutical products.

According to a bourse filing, the new additional selected pharmaceutical products in the Middle East region are set to be used in the Saudi Export stand at the upcoming Arab Health Expedition 2023.

Under the terms of the new MoU, Bioventure, a subsidiary of GlobalOne Healthcare Holding, is set to focus and develop various delivery forms including complex-to-develop formulations, diabetes, oncology, and biosimilars.

In addition to this, the biopharmaceutical company is also expected to advance and propel therapeutic categories that are projected to be among the largest and fastest-growing within the global pharma sector over the coming years.

The financial impact of the one-year agreement which was signed on Feb. 1 is yet to be disclosed.

Commenting on the agreement, Thamer Al-Muhid, CEO of investment firm Saudi Chemical Co. Holding – of which AJA Pharma is a subsidiary – said: “SSCH aspires to develop its manufacturing arm in the pharma sector, AJA Pharma, through such investment which will contribute to strengthening its position as a Saudi pharmaceutical manufacturer in the field of Oncology, Diabetes and Specialty products, to serve and meet community needs.”

Also, Ashraf Radwan, CEO of GlobalOne Healthcare, said: “Bioventure is committed to improving access to quality healthcare for patients in the Middle East, and this MoU with AJA Pharma marks a significant step towards achieving that goal. By expanding our licensing and supply capabilities, we can bring a wider range of innovative, effective treatments to the people who need them most. I am thrilled to be working with AJA Pharma to bring these solutions to patients in the Middle East and make a meaningful difference in their lives”.

Bioventure is a biopharmaceutical company with a global network focused on biotech as well as a wide range of pharmaceutical activities.


SAMA among Gulf central banks to mirror US Fed 25 bps interest rate hike  

SAMA among Gulf central banks to mirror US Fed 25 bps interest rate hike  
Updated 02 February 2023

SAMA among Gulf central banks to mirror US Fed 25 bps interest rate hike  

SAMA among Gulf central banks to mirror US Fed 25 bps interest rate hike  

RIYADH: The Saudi Central Bank has increased its interest rate by 25 basis points to 5.25 percent, echoing Wednesday’s move by the US Federal Reserve to curb inflation. 

A statement from the bank, also known as SAMA, noted its Reverse Repo rate has also increased to 4.75 percent.  

Inflation is on the rise in the Kingdom, with the annual rate rising to 3.3 percent in December, up from 2.9 percent in November.  

The Fed’s quarter-point interest rate hike follows months of larger increases, as it hiked 50 basis points in December, and 75 basis points in November, September, July and June.

Despite recent signs of a slow down in the US economy, prices are running at their highest level since the early 1980s. 

While the US Central Bank’s decision was driven by its desire to lower high inflation, this played a part in driving the Gulf region’s monetary policy, as most of the region’s currencies are pegged to the dollar.  

Following the US Fed’s decision, regional central banks also swung into action to raise their interest rates – although Qatar chose to hold. 

The UAE's central bank increased its base rate to 4.65 percent, effective on Thursday, while the Central Bank of Oman hiked its Repo rate to reach 5.25 percent.

Bahrain also raised its main rate by 25 basis points, with its one-week deposit facility rate rising to 5.5 percent, while the overnight deposit rate hit 5.25 percent. 

Qatar’s Central Bank said in a press release Wednesday that it would keep its rates unchanged, keeping its deposit rate at 5 percent, its lending rate at 5.5 percent, and its repo rates at 5.25 percent. 

As it was predicted that the country would mirror the Fed in early 2023 by the credit ratings agency Fitch in a report last month, this decision came somewhat as a surprise. 

The Central Bank of Kuwait, which raised its interest rate by 50 basis points last month, often acts separately and does not necessarily follow the Fed’s hikes.  

In addition, the Central Bank of Egypt is forecast to raise its overnight interest rates by 150 basis points at its regular monetary policy committee meeting on Thursday, a Reuters poll showed last Monday.  

The CBE increased its interest rates by an unprecedented 800 basis points over the last year alone, and has been involved in a constant series of currency devaluations.  

A poll of 13 analysts anticipated the bank to increase its deposit rate to 17.75 percent and its lending rate to 18.75 percent.  


Egypt poised to announce detailed plan for state stake sales

Egypt poised to announce detailed plan for state stake sales
Updated 02 February 2023

Egypt poised to announce detailed plan for state stake sales

Egypt poised to announce detailed plan for state stake sales

CAIRO: Egypt's government aims to announce a detailed plan next week to offer stakes in at least 20 state companies over the coming year, Prime Minister Moustafa Madbouly said after a cabinet meeting on Wednesday.

An Egyptian plan to sell stakes in public companies, first announced more than five years ago, has gained new urgency since the Russian invasion of Ukraine triggered heavy foreign investment outflows from Egyptian financial markets and threw the economy into crisis.

Egypt in December agreed to a $3 billion rescue plan with the International Monetary Fund in expectation that the state withdraws from some non-strategic sectors of the economy to allow space for the private sector to grow.

"The whole goal is to increase the participation of citizens and the private sector in the development process and their management and participation in public institutions that have been owned by the state," Madbouly said, adding that a detailed plan should be in place after the next cabinet meeting.

The company offerings will be made over the course of a year, with some being sold on the stock exchange and others to strategic investors, Madbouly said.

"Large investors will also participate in restructuring and expanding production lines of the companies while also increasing their capital," he added.


Basra Oil Co. head expects Qatar to take 20-25% stake in TotalEnergies’ Iraq project 

Basra Oil Co. head expects Qatar to take 20-25% stake in TotalEnergies’ Iraq project 
Updated 02 February 2023

Basra Oil Co. head expects Qatar to take 20-25% stake in TotalEnergies’ Iraq project 

Basra Oil Co. head expects Qatar to take 20-25% stake in TotalEnergies’ Iraq project 

BASRA: The head of Iraq's Basra Oil Co. told Reuters on Wednesday that he expects Qatar to acquire a 20-25 percent stake in TotalEnergies' $27 billion cluster of energy projects in the country, with the Baghdad government aiming to hold around 40 percent. 

A major investment in the projects by a Gulf state would be an important win for Iraqi Prime Minister Mohammed al-Sudani, who took office last October following more than a year of political turmoil. It would also be considered a step towards countering Iranian influence. 

"Qatar is one of the promising and developed countries in this regard...we determine our percentage as an Iraqi country, and the rest is for Total and QatarEnergy...I don't expect more than 20-25 percent, they are talking about 30 percent," said Bassem Abdul Karim, director general of state-run BOC, referring to Qatar's potential stake. 

"The important thing for us is to set our share...Iraq is talking about 40 percent." 

Talks are ongoing, Abdul Karim added. Sources told Reuters last week that Qatar was looking to acquire a stake of around 30 percent in the project. 

QatarEnergy and TotalEnergies did not immediately respond to requests for comment. 

Abdul Karim said he hopes that the contract with France's TotalEnergies — which was signed in 2021 and requires an initial investment of $10 billion to build four giant solar, gas, power and water projects in southern Iraq over 25 years — would be activated within three months. 

The deal had stalled amid disputes between Iraqi politicians over the terms of the deal, which have not been made public, sources familiar with the situation told Reuters early last year, although the oil ministry said it just "needed time". 

France and Iraq signed a treaty last month seeking to strengthen bilateral relations in anti-corruption, security, renewable energy and culture, while committing to the implementation of the TotalEnergies project. 

Separately, Abdul Karim said that Iraq’s oil production from its southern oilfields currently stands at 3.59 million barrels per day. 

 


Abu Dhabi's Borouge announces $400m cost savings drive; Q4 profit drops

Abu Dhabi's Borouge announces $400m cost savings drive; Q4 profit drops
Updated 02 February 2023

Abu Dhabi's Borouge announces $400m cost savings drive; Q4 profit drops

Abu Dhabi's Borouge announces $400m cost savings drive; Q4 profit drops

DUBAI: Abu Dhabi's Borouge announced a $400 million cost savings drive on Thursday to navigate inflation and supply chain disruptions, as it reported a 17 percent decline in fourth-quarter profit on pricing compression for polyethylene and polypropylene.

The program was introduced "in response to the prevailing market challenges and to sustain its competitive positioning," adding that its core markets, the Asia Pacific and the Middle East, remain stronger than in developed markets, the petrochemicals firm said in a statement.

The polyefins producer said the benefits of its program should mostly be felt in the second half of the year, offsetting anticipated market pressures, and expects the recent shifts in China's COVID policy to stimulate demand, but that would take some time to take effect.

"We will be looking at all levers," Chief Financial Officer Jan-Martin Nufer said in a post-earnings interview.

"We will need to look at all the cost areas, into logistics variable cost and conversion variable costs but also at the fixed costs."

Borouge reported a net profit of $247 million in the three months to Dec. 31 on a pro forma basis, down from $299 in the comparable period a year earlier, it said in a regulatory filing.

Borouge's board has mandated its executive management to actively explore growth opportunities through international expansion, the company said in the filing.

It also reiterated its commitment to pay $975 million in post-initial public offering dividends to shareholders for 2022, of which $325 million has already been paid, and at least $1.3 billion for 2023.

Abu Dhabi National Oil Co. and Austria's Borealis own a 54 percent and 36 percent stake in Borouge, respectively.