Camel milk set to provide sustenance for Saudi Arabia’s economic transformation

Camel milk set to provide sustenance for Saudi Arabia’s economic transformation
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Updated 09 December 2023
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Camel milk set to provide sustenance for Saudi Arabia’s economic transformation

Camel milk set to provide sustenance for Saudi Arabia’s economic transformation
  • Camels have long served as a crucial food, natural and cultural resource of the Middle East region

RIYADH: Saudi Arabia is currently one of the biggest producers of camel milk and a host of new ventures are making the business a lucrative one in the transformation of the country’s economy.

The Kingdom has an annual output of approximately 0.271 million tons of the product, and Saudi Arabia’s sovereign wealth fund has set up a new firm, Sawani Co., to catalyze the growth of the sector as part of its efforts to transform the country’s economy.

The move comes at a time when the Public Investment Fund’s various investments in the Saudi food and agriculture sector to support its produce industries gain momentum.

“Saudi Arabia has extensive experience and knowledge of the camel dairy industry, and enormous potential to expand its operational capabilities and wider ecosystem,” said Majed Al-Assaf, head of Consumer Goods and Retail in the Middle East and North Africa Investments Division at PIF, in a statement.

He added: “These factors represent a competitive advantage across the entire supply chain, which will enable significant growth of the industry, and eventually lead to the export of camel dairy products to regional and global markets.” 

Ahmed Gamaleldeen, CEO of Sawani, affirmed the company’s position in its sector, telling Arab News: “Sawani Co. has an essential role to play in elevating standards within the camel dairy sector. Based in Saudi Arabia with a global reach, our organization seeks to actively contribute to the development of the sector, highlighting the merit of camel-based products from both a health and commercial standpoint.”

He added: “We are committed to raising awareness of camel products through our operations and initiatives, helping to continue a longstanding tradition of sustainable camel milk production to serve Saudi Arabia, the region and other parts of the world.”

While seeking to become a leading producer of camel dairy products, the company will also place sustainability at the center of all stages of production, distribution, and marketing as well as raise awareness of the health benefits of camel dairy products among consumers.

Sawani looks to work with the private sector to boost production capacity and drive sustainable growth of the camel dairy industry.

This includes raising the standards of the domestic production ecosystem through modernizing operations and introducing best scientific practices, improving knowledge localization and transfer and investing in the sector’s latest manufacturing technologies. 

Saudi Arabia has extensive experience and knowledge of the camel dairy industry, and enormous potential to expand its operational capabilities and wider ecosystem.

Majed Al-Assaf, head of Consumer Goods and Retail in the Middle East and North Africa Investments Division at PIF

Highlighting the company’s aspirations within the camel dairy industry, Gamaleldeen said Sawani has both regional and international ambitions.

“With a myriad of health benefits associated with camel-based products, our aim is to showcase the product’s commercial viability as a solution for consumers who are lactose intolerant, diabetic or seeking nutrient-dense dairy products,” he said.

The CEO added that Sawani’s long-term strategy is rooted in “Saudi Arabia’s rich camel heritage and sustainable cohesion with one of nature’s most loyal and giving creatures.”

According to research company IMARC, the camel dairy market across the Gulf Corporate Council region reached a value of $702.4 million in 2022, and is expected to see a compound annual growth rate of 4.51 percent from 2023 to 2028.

Camels have long served as a crucial food, natural and cultural resource of the Middle East region.

They provide meat and milk as well as play a role in heritage rituals throughout Saudi Arabia and the greater Middle East. It is estimated that there are around 1.6 million camels in the Kingdom, with over half residing in the provinces of Riyadh, Makkah and the Sharqiya or Eastern Province.

Compared to cow’s milk, camel’s milk has lower levels of fat – perfect for those who are wishing to maintain a healthier lifestyle. 




Sawani looks to work with the private sector to boost production capacity and drive sustainable growth of the camel dairy industry. (Supplied)

It contains high amounts of vitamins A, B, E and C, and is also rich in calcium, iron, protein and antioxidants.

The UN Food and Agriculture Organization has endorsed products made from camel milk, saying such goods are greater in nutritional value than goat and cow’s milk in terms of vitamins, minerals and protein.

The Kingdom’s investment in the industry reflects Saudi Vision 2030 to diversify the economy away from its reliance on hydrocarbons.

In the Kingdom, three licensed projects are specializing in camel milk and its various uses, while three other initiatives have been granted preliminary licenses to manufacture consumable camel milk products. 

We are committed to raising awareness of camel products through our operations and initiatives, helping to continue a longstanding tradition of sustainable camel milk production.

Ahmed Gamaleldeen, CEO of Sawani

According to Shujaa Al-Bogmi, an associate professor at Imam Mohammad Ibn Saud Islamic University, Sawani’s investment in the camel industry will have a great impact on the growth of the market both locally and internationally.

It will not only raise the production standards for products made from camel milk, but also result in an increased demand for the products from the Gulf region.

An eagerness to make products from camel milk has already jump-started in the Kingdom.

In September, Sawani launched Noug, the first camel milk café opened in Riyadh, specializing in milk, cheese, butter and even gelato. 

HIGHLIGHT

The Kingdom has an annual output of approximately 0.271 million tons of the product, and Saudi Arabia’s sovereign wealth fund has set up a new firm, Sawani Co., to catalyze the growth of the sector as part of its efforts to transform the country’s economy.

As IMARC noted in its report, the increasing awareness of the health benefits of camel milk as well as the potential of the market for the product make it a favorable investment opportunity for government initiatives and a crucial catalyst for growth.

Investment in the market also has the potential to promote sustainable farming practices in the Kingdom.

To this end, Sawani is offering financial incentives and subsidies to encourage the growth of the camel dairy sector. Such support extends to both large-scale commercial farms and small-scale farmers, promoting inclusivity and sustainable growth in the industry.

As Gamaleldeen notes: “Sawani Company is dedicated to driving growth in Saudi Arabia’s camel dairy sector. As consumers become aware of the health benefits of camel-based dairy products, we aim to amplify awareness of products, ethically sourced from an animal that has remained a source of pride for the people of the Kingdom.”


WTO conference spotlights global trade challenges and collaborative solutions

WTO conference spotlights global trade challenges and collaborative solutions
Updated 27 February 2024
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WTO conference spotlights global trade challenges and collaborative solutions

WTO conference spotlights global trade challenges and collaborative solutions
  • Established in 1995, the World Trade Organization serves as global authority governing international trade regulations
  • The four-day conference, which kicked off on Monday, will feature trade ministers, senior officials from around the world

RIYADH: Global trading system accessibility, intellectual property, and dispute settlement take center stage as the 13th World Trade Organization Ministerial Conference commenced in Abu Dhabi.   

The four-day event, starting on Feb. 26, will address these issues within the WTO, featuring the participation of trade ministers and senior officials from around the world, the Saudi Press Agency reported. 

The event will bring together 175 member states, private sector leaders, nongovernmental organizations, and civil society representatives.  

The goal is to collaborate on advancing a more efficient, sustainable, and inclusive trading system while enhancing the effectiveness of trade policies and programs. 

Participants in this conference edition aim to build upon the achievements of the previous ministerial conference held in Geneva in June 2022. The event witnessed accomplishments in supporting fisheries, food security, and e-commerce, the SPA report added. 

Speaking on behalf of the Saudi government, Commerce Minister Majid Al-Qasabi began his video address by pointing out that the event provides a pivotal opportunity to mark the WTO’s 30th anniversary.  

“We all look forward to working with you to achieve successful outcomes of the MC 13. Such outcomes would support restoring trust in the multilateral trading system, that is facing significant challenges and headwinds, confirming the essential role of the WTO, and reiterating the global trade agenda,” he said.  

Al-Qasabi warmly welcomed Comoros and Timor-Leste as new members of the WTO, reaffirming the commitment to accelerating the remaining accession.  

He also announced the Kingdom’s approval of the Agreement on Fisheries Subsidies, noting the WTO’s contribution to the economic growth and development of its members.  

The minister emphasized the importance for the Kingdom to achieve constructive and meaningful outcomes in Abu Dhabi and beyond. 

He concluded by reaffirming Saudi Arabia’s commitment to working constructively with all members to ensure the success of the 13th ministerial conference and beyond. 

Established in 1995, the WTO serves as the global authority governing international trade regulations. Its biennial ministerial conference acts as the paramount decision-making platform, bringing together ministers and senior officials from all member nations to assess, revise, and enhance the treaties shaping the global trade framework.  

Ahead of the event, WTO Director General Ngozi Okonjo-Iweala unveiled a $50 million initiative aimed at empowering female entrepreneurs in developing countries. 

The new fund looks to unlock the power of the digital economy, helping women exporters overcome financing hurdles and capture untapped opportunities. 

“This initiative embodies our collective commitment to empowering women,” Okonjo-Iweala said, adding that it is a crucial step toward addressing the financing gap faced by women entrepreneurs, who are “key drivers of economic growth and development.” 

Meanwhile, Thani bin Ahmed Al-Zeyoudi, the UAE’s minister of state for foreign trade and chair of the 13th WTO Ministerial Conference 2024, announced that the country allocated $5 million to the $50 million fund.  

Abdullah bin Zayed Al-Nahyan, the UAE’s minister of foreign affairs, earlier announced that the Gulf country will provide a $10 million grant to support several key initiatives of the WTO.  

He added that the grant would be allocated to the Fisheries Funding Mechanism, the Enhanced Integrated Framework, and the WEIDE fund that will be launched during the event.

 


Moody’s affirms credit ratings of key Saudi companies

Moody’s affirms credit ratings of key Saudi companies
Updated 26 February 2024
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Moody’s affirms credit ratings of key Saudi companies

Moody’s affirms credit ratings of key Saudi companies

RIYADH: Several prominent Saudi companies received affirmation on their credit ratings from Moody’s Investor Services, a leading global provider of financial assessments, research, and risk analysis.

Following the agency’s recent update to its Government-Related Issuers Methodology, several firms, including Saudi Basic Industries Corp., Saudi Telecom Co., and Saudi Electricity Co., have maintained their A1 ratings, while Saudi Arabian Mining Co., also known as Ma’aden, continues to hold a Baa1 rating.  

For SABIC, the A1 rating acknowledges its strong global presence in the petrochemicals market, competitive cost structure, and robust financial health.  

Moody’s also highlights the cyclical nature of SABIC’s operations and its concentration in Saudi Arabia as considerations. 

stc’s A1 rating reflects its dominant position in the Saudi telecommunications sector, strong financial metrics, and substantial government support. Challenges include market competition and the capital intensity of the telecom industry, Moody’s stated. 

SEC’s rating considers its integrated electricity operations, market dominance, and regulatory support balanced against the company’s growing debt burden due to significant infrastructure investments. 

Ma’aden’s Baa1 rating is supported by its diversified production, low-cost operations, and strategic importance to Saudi Arabia’s economy. 

The company’s exposure to commodity price volatility and its expansion plans are areas of focus. 

The positive outlooks for SABIC, stc, and SEC align with Moody’s view on the government of Saudi Arabia, indicating a high likelihood of state support.  

Furthermore, Ma’aden’s stable outlook reflects its solid financial policies and liquidity management. 

The ratings of the Saudi companies could potentially be upgraded or downgraded based on several factors outlined by Moody’s.  

For SABIC, an upgrade could be on the horizon if the ratings of the Saudi government or Saudi Aramco are elevated or if the company itself demonstrates improved revenue and profitability and maintains strong credit metrics and liquidity.  

Conversely, SABIC’s ratings might face a downgrade if the company experiences a significant downturn in operating performance or engages in heavy debt-financed investments, pushing its deficit to earnings before interest, taxes, depreciation, and amortization ratio toward a multiple of 1.5. 

Similarly, stc could see its scores positively impacted if the ratings of the government or the Public Investment Fund are upgraded, given its status as one of the highest-rated telecom operators globally.  

However, an escalation in competition, debt-financed acquisitions, or sustained negative free cash flow could apply downward pressure on stc’s ratings. Any decrease in the government’s or PIF’s ratings would also likely result in a downgrade for stc. 

SEC’s situation mirrors that of the aforementioned entities, with the potential for an upgrade if the sovereign rating of Saudi Arabia or the PIF improves, contingent upon the company maintaining strong operational and financial performance.  

A downgrade could occur if there is a notable decline in the company’s liquidity profile or its financial metrics weaken significantly. 

Ma’aden’s ratings could be elevated if the company successfully reduces its debt relative to EBITDA and boosts its retained cash flow to net debt ratio while maintaining strong liquidity. 

Conversely, an increase in debt and EBITDA ratio beyond certain thresholds or a significant weakening of liquidity could trigger a downgrade.  

Adjustments in the perceived likelihood of support from PIF or the government in times of financial stress could also influence Ma’aden’s ratings.


Closing Bell: TASI drops to 12,532, records $2.4bn trade volume  

Closing Bell: TASI drops to 12,532, records $2.4bn trade volume  
Updated 26 February 2024
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Closing Bell: TASI drops to 12,532, records $2.4bn trade volume  

Closing Bell: TASI drops to 12,532, records $2.4bn trade volume  

RIYADH: Saudi Arabia’s Tadawul All Share Index closed at 12,531.76 points on Monday, marking a decrease of 72.83 points or 0.58 percent.   

The parallel market Nomu concluded at 25,592.61, registering a fall of 109.54 points, or 0.43 percent. Alongside, the MSCI Index also descended by 3.81 points to settle at 1,616.76, a drop of 0.24 percent.   

By the day’s end, the main index posted a trading value of SR9.15 billion ($2.4 billion) with 42 stocks advancing and 186 declining. On the other hand, Nomu reported a trade volume of SR47.1 million.   

TASI’s top performer was Saudi Arabian Amiantit Co., which saw a 7.69 percent jump to SR31.50.

Maharah Human Resources Co. and Wataniya Insurance Co. also recorded notable gains, with their shares closing at SR7.21 and SR22.56, marking an increase of 6.19 percent and 5.82 percent, respectively. The Co. for Cooperative Insurance and Saudi Paper Manufacturing Co. also fared well.   

On the announcement front, Saudi German Health successfully concluded the offering of its Saudi Riyal-denominated sukuk, reaching a total value of SR1 billion.  

The offering comprised 1 million sukuk, each with a nominal value of SR1,000, and a fixed annual yield of 7.20 percent, paid out quarterly over a maturity period of five years.  

The company has specified that under certain conditions detailed in the base prospectus and the final terms, the sukuk may be redeemed before their maturity date.

Investors can review these final terms, which will be available on Al Rajhi Capital’s website starting Mar. 6, 2024, the entity overseeing the subscription management for this issuance.  

The allocation of sukuk to investors will be finalized by the end of Feb. 29, with the settlement process concluding on Mar. 6, 2024.   

Furthermore, Saudi German Health plans to list the sukuk on Saudi Stock Exchange once all regulatory procedures necessary for the listing are completed, with an announcement to be made at the appropriate time.  

Moreover, Alinma Bank is set to bolster its Tier 1 capital through a strategic move to issue additional sukuk denominated in US dollars.   

This initiative, aimed at enhancing the bank’s capital base and supporting its general banking operations, follows a board resolution authorizing the CEO to manage the issuance process.  

The planned issuance will be executed by a special-purpose vehicle, targeting qualified investors both within Saudi Arabia and internationally.   

Participating as joint lead managers, Abu Dhabi Islamic Bank, Alinma Investment Co., and Emirates NBD, have been appointed to oversee the issuance, as well as J.P. Morgan Securities, MUFG Securities EMEA, and Standard Chartered Bank.


Saudi Arabia records 10% surge in number of factories

Saudi Arabia records 10% surge in number of factories
Updated 26 February 2024
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Saudi Arabia records 10% surge in number of factories

Saudi Arabia records 10% surge in number of factories

RIYADH: The number of industrial units in Saudi Arabia recorded a 10 percent surge year on year in 2023 to reach 11, 549, according to the Ministry of Industry and Mineral Resources.

A spokesman for the minister, Jarrah bin Mohammed Al-Jarrah, revealed that the new industrial establishments were set up with an investment of SR1.54 trillion ($48.4 billion).

The rise in the number of factories falls in line with the Kingdom’s plan of boosting industrialization and achieving a target of 36,000 plants by 2035.

Moreover, the number of new industrial licenses issued in 2023 reached 1,379, with investments amounting to more than SR81 billion.

On the other hand, production began in a total of 1,058 factories during the same year with investments amounting to SR45 billion.

In addition, Al-Jarrah noted that the new licenses were distributed among 25 industrial activities, led by food products manufacturing with 244 permits, followed by the manufacturing of non-metallic mineral products (176) and the manufacturing of formed metal products with 165. A total of 123 licenses were issued to factories engaged in the manufacturing of rubber and plastic products.

With a vision to increase the number of factories to 36,000 by 2035, including 4,000 which will be fully automated, Saudi Arabia is poised to create a dynamic and innovative production landscape.

The adoption of advanced technologies, including artificial intelligence, 3D printing, and robotics, positions Saudi industries as global leaders of this revolution.

The Kingdom’s industrial sector is experiencing sustained growth, with investments in manufacturing reaching $132 billion since the launch of the economic diversification strategy Vision 2030 in 2016.


Houthi Red Sea strikes affecting half of UK retailers: Research

Houthi Red Sea strikes affecting half of UK retailers: Research
Updated 26 February 2024
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Houthi Red Sea strikes affecting half of UK retailers: Research

Houthi Red Sea strikes affecting half of UK retailers: Research
  • British Chambers of Commerce: Commercial container prices up as much as 300%
  • Moody’s: Retailers could face ‘material impact on profitability by end of 2024’

LONDON: Disruptions to global trade caused by the Houthi campaign against shipping in the Red Sea is affecting more than half of all retailers in the UK.

Research conducted by the British Chambers of Commerce across more than 1,000 companies in the UK found that container shipping prices have jumped as much as 300 percent, while goods have been delayed for up to a month, prompting supply shortages and cash flow problems.

The Houthis launched their campaign against commercial vessels in November in a bid to end Israeli military strikes on Gaza, which began in the aftermath of the Oct. 7 Hamas attack.

Air and sea strikes against the Houthis in Yemen by US and UK forces have so far failed to curtail the attacks. Eighteen Houthi targets were hit in airstrikes over the weekend.

The average cost of shipping goods from China to Europe has more than doubled, with most ships preferring to travel around Africa rather than risk attack by approaching the Suez Canal.

In 2023, around 22 percent of all commercial shipping containers passed through the canal, according to the UN Conference on Trade and Development. That total has since fallen by 82 percent, with 586 ships rerouting around Africa.

The BCC’s head of trade policy, William Bain, urged the UK government to provide more support to British retailers ahead of its budget next week.

“There has been spare capacity in the shipping freight industry to respond to the difficulties, which has bought us some time. And recent (government) data also indicates the impact has yet to filter through to the UK economy, with inflation holding steady in January,” he said.

“But our research suggests that the longer the current situation persists, the more likely it is that the cost pressures will start to build.”

Bain said new post-Brexit laws “adding to costs and delays” had made it “a difficult time for firms.”

Credit ratings agency Moody’s warned this month that retailers would experience a “material impact on profitability by the end of 2024” if the situation in the Red Sea did not significantly improve.

Bain said: “The UK economy saw a drop in its total goods exports for 2023 and, with global demand weak, there is a need for the government to look at providing support in the March budget.”

The crisis has also led to an increase in pressure on air freight companies, with delivery aggregator ParcelHero noting an uptick of 8 percent on spot rates between Europe and China, and 14 percent between China and the US.

Supply issues are expected to worsen in March as Chinese exports increase following the country’s New Year holidays, which concluded over the weekend.

David Jinks, head of consumer research at ParcelHero, said: “Initially, there was a scramble for aviation services as businesses rushed to get products out before the festivities began.

“Now the continuing demand for air freight on this route is because many ships are berthed for the duration and containers are stuck firmly in Chinese ports until manufacturing ramps up enough to restore full services.

“Air freight enables those companies manufacturing and operating in Asia to leapfrog the Chinese bottleneck.”