Optimism and adaptability set Saudi and Gulf markets apart in dealing with disruption, says business leader

Special People visit the Boulevard entertainment city in Riyadh. (AFP/File Photo)
People visit the Boulevard entertainment city in Riyadh. (AFP/File Photo)
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Updated 20 January 2024

Optimism and adaptability set Saudi and Gulf markets apart in dealing with disruption, says business leader

People visit the Boulevard entertainment city in Riyadh. (AFP/File Photo)
  • AlixPartners’s EMEA head, Rob Hornby, spoke to Arab News at WEF

DAVOS: Businesses around the world, and in the Middle East region, are getting better at coping with disruption amid the impact of factors such as geopolitical unrest, the COVID-19 pandemic, supply chain instability, worker shortages and inflation, according to findings released this month in global consulting firm AlixPartners’ Disruption Index.

The company’s EMEA head, Rob Hornby, spoke to Arab News about the index and what it means for the business landscape in the Kingdom, the Middle East region and other emerging markets.

“Headline number one is: Businesses still feel very disrupted. It has gone down (over the past year), but it’s still at high levels compared to what we could consider the old normal prior to 2020,” he said.

While short term pressures have eased, those mentioned in the index that are still giving businesses cause for concern are inflation and interest rates, he said. 

Rob Hornby, EMEA chief at AlixPartners. (Supplied)

“What that’s done is, just as they have abated slightly, it has brought into sharp focus the longer term disruptive forces, namely geopolitics, which I think is getting trickier, demographics, technology transition, climate change. These didn’t go away, they just got obscured by crises,” he said.

“These (forces) are less in the control of businesses, they can respond to them, but they can’t really influence them much, so they’re having to devise flexible contingent strategies. 

“Businesses, in general, are getting better at dealing with the disruption, they are learning to cope with it.

“I think the Middle East is good at this thing, they’re very adaptable, they’ve had to be flexible and innovative simply to be part of emerging markets. I think these businesses and regions are going to do relatively well.

“For the Gulf region, in particular, disruptions afford at least as much opportunity as they do a threat.

“What they have done so far has been tactically very clever, well-judged and as a consequence I think they’re on a period of growth, not just economically, but also in terms of influence and a place to attract talent, they’re on that path,” he added.

The Kingdom, and the wider region, is also hotbed for development and business growth, as illustrated by the market for mega-projects such as NEOM, and its optimism about the success of said projects is second to none, according to Hornby.

NEOM House at the 2024 World Economic Forum in Davos, Switzerland. Ambition in Middle East countries, including in Saudi Arabia, which manifests itself in mega-projects such as NEOM are a symbol of business confidence and optimism in the face of global disruption. (NEOM)

“I’m always struck when I go to any part of the region by its very positive outlook, they’re generally very well joined-up with government, there’s a lack of cynicism. I think that’s such a big thing,” he said.
“There’s an optimism and a belief that something can be created. I think that’s incredibly powerful in the midst of disruptive forces and unpredictable events.

“The region is extremely well positioned, and businesses in the region have the right kind of mentality, they are ready and they are probably ahead (globally). With the geopolitical reshuffle that’s going on, I think Saudi Arabia in particular is gaining influence,” he added.

Hornby said Saudi Arabia’s young population and its high levels of technology adoption among its youth also make it ideally placed to benefit from the artificial intelligence and tech market wave coming over the next decade.

“There’s talent, the demographics are good,” he said. “I think it’s also becoming aspirational from a lifestyle perspective, I think that’s the big change, particularly in Saudi Arabia. The Middle East is adapting itself and developing itself to have some of those advantages (as a place to live),” he added.

Hornby, on whether Riyadh could become the most attractive hub in the region for businesses ahead of Dubai, said he hoped it would get to a point where business would not have to choose between the two.

“Personally, I think both of them have a bright future,” he said. “There’s enough share of influence and economic success in the region, I think they’d be better competing with the rest of the world, not with each other.

“And we haven’t yet spoken about NEOM. By design, that is a world city in aspiration, which is such a departure for Saudi Arabia,” he said, agreeing that, if completed to plan, it would be “world-leading.”


Saudi Aramco’s Wa’ed Ventures invests $15m in South Korean chipmaker Rebellions

Saudi Aramco’s Wa’ed Ventures invests $15m in South Korean chipmaker Rebellions
Updated 18 sec ago

Saudi Aramco’s Wa’ed Ventures invests $15m in South Korean chipmaker Rebellions

Saudi Aramco’s Wa’ed Ventures invests $15m in South Korean chipmaker Rebellions

RIYADH: Energy giant Saudi Aramco’s growth capital arm, Wa’ed Ventures, has invested $15 million in chipmaker firm Rebellions, marking the fund’s first investment in a South Korean startup.  

The funding will enable Rebellions to accelerate the development of artificial intelligence chips globally and expand its business into the Kingdom, according to a press statement. 

Saudi Arabia is aggressively pushing to develop its chipmaking industry as part of its broader strategy to advance technological capabilities and drive economic diversification under Vision 2030. 

Fahad Alidi, managing director at Wa’ed Ventures, said: “This investment underscores our commitment to fostering innovation in the semiconductor industry, which has become one of the strategic focus areas in Saudi Arabia’s vision for technological advancements.”  

Established in 2013 by Saudi Aramco, Wa’ed Ventures is a $500 million venture capital fund investing in technology-based startups to promote economic diversification and business growth in the Kingdom.  

It currently manages a portfolio of over 70 startups, providing end-to-end support from funding to partner resources. 

The investment will help Rebellions establish a foothold in the Saudi AI infrastructure market and align with the Kingdom’s aim for economic diversification through technological advancements. 

“This strategic investment is pivotal as it not only accelerates our growth but also enhances our global business opportunities, particularly in the Kingdom of Saudi Arabia, where AI technology investment is thriving. This partnership provides us with a clearer path to expand and innovate in key markets worldwide,” said Sunghyun Park, CEO of Rebellions.  

Founded in 2020, Rebellions specializes in AI inference accelerators with superior energy efficiency and low-latency performance. The company has introduced two AI chips in three years and plans to roll out its third in the latter half of 2024. 

Rebellions completed a $124 million Series B funding round in January and has now secured over $225 million in total funding since inception. The company is working with Samsung Foundry on its next-gen AI chip, REBEL. 

Earlier this month, Wa’ed Ventures also led a $6.5 million pre-Series A funding round for California-based AI platform aiXplain. Backed by US firms including Transform VC and Calibrate VC, aiXplain has raised $16.5 million to date and is planning a global rollout of AI solutions. 

Oil Updates — crude steadies, weighed down by predicted surplus amid weak demand

Oil Updates — crude steadies, weighed down by predicted surplus amid weak demand
Updated 23 July 2024

Oil Updates — crude steadies, weighed down by predicted surplus amid weak demand

Oil Updates — crude steadies, weighed down by predicted surplus amid weak demand

SINGAPORE: Oil prices steadied on Tuesday after falling for the past two sessions, as investors remained cautious amidst expectations of plentiful supplies and weak demand, while brushing off the US presidential campaign upheaval, according to Reuters.

Brent crude futures for September rose 11 cents to $82.51 a barrel by 09:45 a.m. Saudi time. US West Texas Intermediate crude for September climbed 5 cents to $78.45 per barrel.

Traders mostly ignored US President Joe Biden’s decision to call off his reelection bid and endorse Vice President Kamala Harris on Sunday. Citi analysts said they believed neither Harris nor Republican nominee Donald Trump would promote policies that would greatly affect oil and gas operations.

Instead, the market focused on fundamentals, which Morgan Stanley analysts said were likely to balance out by the fourth quarter and rise to a supply surplus by next year, which would drag down Brent prices to the mid-to-high $70s per barrel range.

Any uptick in oil prices was more because of market consolidation and dip buying activity, said Priyanka Sachdeva, senior market analyst at Phillip Nova.

“Any further weakening of demand signals, combined with a resolution in Gaza, could lead to a further decrease in oil prices,” Sachdeva said, adding that a swell in US inventories last week would be a sign of dented demand.

The American Petroleum Institute, a trade group, is due to release its estimates for last week’s oil inventories on Tuesday, while official US government data is scheduled to land on Wednesday.

A preliminary Reuters poll of six analysts estimated that US crude stocks, on average, fell by 2.5 million barrels in the week to July 19, while gasoline stocks likely dropped by 500,000 barrels.

The market is also watching developments in Russia. The Tuapse oil refinery, its biggest on the Black Sea, was damaged in a major Ukrainian drone attack that sparked a fire, Russian officials said on Monday, though the extent of the damage was not immediately clear.

“Further strikes on Russian refinery capacity would support refined product prices, due to lower output, and somewhat bearish for crude oil, as it would increase availability of crude oil for export,” said ING market strategists in a note.

Pakistani PM sets sights on annual exports of $60 billion in 3 years

Pakistani PM sets sights on annual exports of $60 billion in 3 years
Updated 23 July 2024

Pakistani PM sets sights on annual exports of $60 billion in 3 years

Pakistani PM sets sights on annual exports of $60 billion in 3 years
  • Pakistan’s exports in previous fiscal year crossed $30 billion, says Shehbaz Sharif
  • Directs power ministry to develop plan to provide low-cost electricity to industries

ISLAMABAD: Prime Minister Shehbaz Sharif on Tuesday tasked authorities to increase Pakistan’s annual exports to $60 billion within three years, stressing the need to resolve exporters’ complaints as Islamabad seeks to enhance its foreign exchange reserves while grappling with a macroeconomic crisis. 

Pakistan is trying to navigate a tricky path to recovery from a prolonged economic crisis that has seen the South Asian country’s national currency weaken, its reserves plummet and inflation rise to a record high over the last two years. To stabilize its fragile $350 billion economy, Islamabad has increasingly sought to establish trade and investment relations with regional allies in recent months. 

Sharif chaired a meeting of Pakistan’s National Export Development Board on Tuesday to take stock of the country’s exports and discuss ways to enhance them. 

“The Ministry of Commerce and other institutions should take practical steps to achieve the target of taking exports to $60 billion in the next three years,” the prime minister was quoted as saying by his office. 

Sharif noted that Pakistan’s annual exports had crossed the $30 billion mark during the previous fiscal year, adding that the government’s policies took the country’s IT exports to over $3.2 billion. He directed authorities to resolve exporters’ complaints and submit a report to him within two weeks. 

“We salute the businesspersons and investors who have played their role in increasing Pakistan’s exports despite difficult conditions,” Sharif said, according to the Prime Minister’s Office (PMO).

The prime minister called for reducing the delivery time Pakistani goods take to reach Europe and America, saying that this could be achieved by solving problems related to shipping. He emphasized increasing the quality of Pakistani exports through research and development, innovation and brand development. He directed Pakistan’s power ministry to present a comprehensive plan through which low-cost electricity is provided to industries.

Sharif warned Pakistan’s tax authority, the Federal Board of Revenue, (FBR) against delaying refunds to exporters, urging trade officers in Pakistan’s missions abroad to promote the country’s exports and guide exporters on increasing their sales.

Riyadh Air signs 5-year deal to use GE Aerospace’s software

Riyadh Air signs 5-year deal to use GE Aerospace’s software
Updated 23 July 2024

Riyadh Air signs 5-year deal to use GE Aerospace’s software

Riyadh Air signs 5-year deal to use GE Aerospace’s software
  • Partnership will equip airline with data-driven analytics

LONDON: Riyadh Air signed a five-year agreement on Monday to use GE Aerospace’s flight operations software, the airline has announced.

The partnership will equip the new Saudi Arabian airline with data-driven analytics to optimize fuel consumption, enhance safety measures, and fortify its sustainability initiatives, a statement said.

It added that the Fuel Insight software will help Riyadh Air position itself as a leader in sustainable aviation.

The airline will also use real-time Flight Data Monitoring and Flight Operations Quality Assurance to ensure high standards of safety and quality across its advanced fleet.

Riyadh Air’s use of FlightPulse technology will allow pilots to identify opportunities for improvement and help maintain best practices in safety and efficiency across the airline’s flight operations.

Peter Bellew, chief operating officer at Riyadh Air, said: “Sustainability and efficiency sit at the core of our operations.

“Our collaboration with GE Aerospace represents a significant advancement in adopting state-of-the-art technology to enhance safety protocols, streamline fuel usage, and uphold our dedication to operational excellence, as we are currently preparing for flight trials and working towards obtaining AOC certification, starting (in) September 2024.”

Andrew Coleman, general manager of software at GE Aerospace, said: “With an incredible partner like Riyadh Air, we are thrilled to see our decades of research, development, and innovation empower their transformative digital journey to help them set new benchmarks for operational excellence, safety standards, and more sustainability in the skies.”

Saudi GACA, Germany’s Lilium sign MoU to boost air mobility roadmap   

Saudi GACA, Germany’s Lilium sign MoU to boost air mobility roadmap   
Updated 22 July 2024

Saudi GACA, Germany’s Lilium sign MoU to boost air mobility roadmap   

Saudi GACA, Germany’s Lilium sign MoU to boost air mobility roadmap   

RIYADH: Saudi Arabia’s General Authority of Civil Aviation has inked a deal with German electric vertical take-off and landing vehicle manufacturer Lilium, propelling the Kingdom’s advanced air mobility roadmap.

The memorandum of understanding, signed between the authority and the aerospace firm at the Farnborough International Airshow, supports GACA’s development of AAM solutions in the Kingdom, according to a statement. 

This comes as the authority collaborates with stakeholders and companies globally to create a thorough national plan for AAM. 

This strategy encompasses the essential elements and regulatory framework needed to ensure AAM technologies’ secure and effective integration. During the implementation phase, the focus will be on incorporating eVTOL operations with existing aviation systems and other transportation modes.

The newly signed MoU falls in line with the authority’s engagement with global companies to bring new aviation mobility solutions to Saudi Arabia.

It also aligns well with GACA’s continuous efforts across the industry to ensure the Kingdom has regulations that encourage growth, ensure the highest levels of safety, and put passengers first.

“This agreement reflects GACA’s commitment to advancing innovative and sustainable air mobility solutions for Saudi Arabia in support of Vision 2030,” GACA President Abdulaziz Al-Duailej said. 

“By working with global advanced air mobility companies, we aim to establish a robust regulatory framework that ensures the safe and efficient operation of eVTOL aircraft,” Al-Duailej added. 

From Lilium’s side, CEO Klaus Roewe said: “Our goal is to jointly advance regulatory and practical steps for suitable framework conditions for electric aviation and our customers in Saudi Arabia.”

He added: “Today’s agreement delivers on one of the main ingredients required to successfully launch eVTOL operations — a definitive path to all relevant regulatory cornerstones.”

The announcement builds on the momentum of recent successful air taxi trials in support of GACA’s AAM roadmap development, the statement added. 

Last week, Lilium confirmed that it is making its debut in Saudi Arabia with a groundbreaking agreement to supply up to 100 eVTOL vehicles to Saudia, the Kingdom’s first national carrier.

The formalization of this agreement came after a framework deal was initially arranged in late 2022, making Saudia the first airline in the region to invest in sustainable air mobility.