Saudi, US business ties set to reach new heights after high-level meeting

Saudi, US business ties set to reach new heights after high-level meeting
Minister of Commerce Majid bin Abdullah Al-Qasabi speaking in Washington. SPA
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Updated 24 April 2024
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Saudi, US business ties set to reach new heights after high-level meeting

Saudi, US business ties set to reach new heights after high-level meeting

RIYADH: Trade relations between Saudi Arabia and the US are set to further prosper after a senior official from the Kingdom met with prominent business leaders.

Minister of Commerce Majid bin Abdullah Al-Qasabi held talks with representatives from the US Chamber of Commerce and prominent American companies in Washington, in which the robust economic connections between the two countries were highlighted.

Speaking to participants of the meeting, Al-Qasabi, who also serves as chairman of the board of directors of the National Competitiveness Center, highlighted the progress made so far in the Kingdom’s journey to achieve its ambitious plan for 2030, as reported by the Saudi Press Agency.

Al-Qasabi noted the transformations within the Saudi economy have spurred the emergence of new sectors and promising business opportunities.

Furthermore, discussions during the meeting tackled ways to enhance cooperation between the chambers of commerce of both countries, mainly through the exchange of best practices aimed at improving the Kingdom’s business environment and attracting US companies.

Saudi Ambassador to the US Princess Reema bint Bandar was also present at the meeting, alongside Khush Choksy, senior vice president for Middle East and Turkiye affairs at the US Chamber of Commerce, and Steve Lutes, vice president of Middle East affairs at the US chamber.

Al-Qasabi and his delegation also visited Georgetown University, where they were briefed on the institution’s collaboration programs and the latest research in areas such as entrepreneurship, corporate governance, and compliance. 

The Saudi delegation also received briefings on the university’s trade policy analysis, international trade law, and economic development, as well as applications of artificial intelligence and machine learning.

Additionally, the visit provided insight into how to address challenges and leverage emerging opportunities in these fields, according to SPA.

Al-Qasabi also held separate meetings with Stefan Umiastowski, senior vice president of Ecolab, a global leader in water, hygiene, and energy solutions, and Stuart Jones, president for Regions and Corporate Relations at Bechtel, one of the world’s largest engineering, procurement, construction, and project management companies.


Patchi founder and chocolate industry titan Nizar Choucair dies

Patchi founder and chocolate industry titan Nizar Choucair dies
Updated 18 June 2024
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Patchi founder and chocolate industry titan Nizar Choucair dies

Patchi founder and chocolate industry titan Nizar Choucair dies

RIYADH: Founder of the globally recognized Lebanese chocolate brand Patchi, Nizar Choucair, has died, leaving behind a legacy in the industry.

Choucair transformed his childhood love for chocolate into a global brand, boasting more than 200 branches worldwide.

In a message on social media, Patchi announced Choucair’s death, posting: “It is with deep sorrow that we announce the passing of Mr. Nizar Choucair, our beloved founder. Mr. Choucair was a man whose warmth and generosity touched everyone who knew him.”

Patchi added: “His visionary approach transformed chocolate into an art that evokes emotions and creates cherished memories. His legacy lives on through Patchi, a brand that has reached hearts across cultures and celebrations. We honor his memory and the extraordinary heritage he built.” 

Choucair was renowned for saying: “In every piece of chocolate, there is a story to be told and a memory to be made.”

The brand’s story began in 1974 when Choucair, driven by his passion for chocolate since the age of 11, introduced the concept of chocolate gifting.

This approach elevated the food to new dimensions, enhancing customer engagement and brand loyalty.

Born in Beirut, Choucair moved to Kuwait at 18, initially working for a gas manufacturing company before returning to Lebanon to launch Patchi.

Patchi employs more than 5,000 people. Shutterstock

In 1990, he received a significant boost when Banque Du Liban gave him an interest-free loan, enabling him to modernize his factory with new machinery.

Starting with a single shop in the Lebanese capital, Beirut, Choucair’s vision and entrepreneurial spirit saw Patchi expand worldwide.

Patchi, now a household name in luxury chocolates, has 203 stores globally, with a strong presence in Lebanon, Saudi Arabia, and Bahrain, as well as Qatar, the UAE, and the UK.

The brand entered the EU market in 1995 with boutiques in Paris and London. By 1999, the company expanded to Africa with a boutique in the Ivory Coast and opened a store in the US in 2000. 

Recognized by Forbes in 2005 as the top luxury brand in the Middle East and the 15th top brand in the region, Patchi continued to grow. 

In 2008, Patchi Silver boutique at Harrods in London was launched, featuring a box of chocolates wrapped in genuine leather and silk, selling for £5,000.

The brand, boasting as many as 62 branches in Saudi Arabia, is celebrated for its premium ingredients and distinctive packaging, all produced in-house. 

In a 2009 interview with The National, Choucair reflected on Patchi’s accessibility: “Our chocolates are not expensive at all. We sell to people who want more expensive, elaborate boxes, but we also sell to the chauffeur who comes to pick it up.”

This inclusive approach helped Patchi become a beloved brand across various demographics, according to Choucair.

The founder’s journey was marked by resilience and adaptability, navigating the challenges of the Lebanese civil war by relocating his family and operations multiple times. Despite these hurdles, his commitment to his brand never wavered. The chocolateries’ expansion continued, with Choucair personally overseeing the opening of new stores worldwide.

Under his leadership, Patchi grew to employ more than 5,000 people, maintaining a family-oriented business ethos. His five children have played active roles in the company, with three of them working alongside him..

Oussama Choucair is currently the CEO of Patchi in the UAE and sits on the board of the company’s conglomerate, which his father founded in Beirut during the 1970s.

Nizar Choucair’s passion for premium chocolate gifting has been passed down to his son, who oversees operations in the crucial UAE market. 

One of Oussama Choucair’s key projects is the construction of a new factory in Dubai Industrial Park, which will become Patchi’s largest manufacturing plant worldwide.

The family remains dedicated to expanding the business into new markets by forming strategic alliances with Armenia, Azerbaijan and Brunei as well as Egypt, Kazakhstan, Kuwait, and East Asia.

In 2012, Patchi launched a new brand identity to refresh its profile and reaffirm its commitment to the values that have made it the top choice for premium chocolate lovers.

The new brand identity was presented in a creative and modern style, reflecting the distinctive and fine quality that Patchi offers through its network of boutiques across Saudi Arabia.

The unveiling event occurred at the Patchi Boutique in Jeddah, attended by Zahid Nuri, then-general manager and co-founder of Patchi in Saudi Arabia.

Nuri stated: “The launch of Patchi’s new identity embodies the company’s dedication to its customers in Saudi Arabia and highlights our commitment to providing the best services, highest quality, and a variety of the most exquisite and finest chocolate gifts. This new identity marks a breakthrough that aligns with Patchi’s significant international expansion, solidifying its position as one of the largest global brands in the chocolate industry.”


Industries must halve emissions, make massive investments for net-zero by 2050: Oliver Wyman

Industries must halve emissions, make massive investments for net-zero by 2050: Oliver Wyman
Updated 18 June 2024
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Industries must halve emissions, make massive investments for net-zero by 2050: Oliver Wyman

Industries must halve emissions, make massive investments for net-zero by 2050: Oliver Wyman

RIYADH: Global industries must halve emissions by the end of this decade to reach 2050 net-zero targets, according to a new analysis urging for increased clean energy infrastructure spending. 

In its latest report, compiled in association with BAE Systems, US-based consultancy firm Oliver Wyman emphasized the urgency of preserving clean water, stopping deforestation, and protecting nearly 1 million threatened species to safeguard the planet. 

The UN has set ambitious climate targets, including reducing global emissions by 45 percent by 2030 and achieving net-zero emissions by 2050, in line with the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels. 

Governments, particularly major emitters, are called upon to significantly enhance their Nationally Determined Contributions and take immediate, decisive actions to curb emissions, as outlined by the UN. 

Underlining the importance of acting swiftly, the Oliver Wyman report said: “To avoid the worst impacts of climate change and ecosystem degradation, we must cut global emissions in half, halt and reverse nature loss, and achieve climate resilience by the end of this decade.”

It added: “The scale of this challenge is monumental. It requires the wholesale reallocation of capital from brown to green, the transformation of assets and supply chains from climate-vulnerable to climate-resilient, and the protection and restoration of ecosystems on a global scale.”  

The report disclosed that just 1 percent — equivalent to $27 billion — of today’s $2.7 trillion annual infrastructure investment is climate-resilient. 

“By 2030, that $27 billion needs to have grown to $6.9 trillion. In the same period, investment in nature-based solutions must triple to $400 billion a year,” said the consulting firm.  

Supply chain resilience and sustainability  

The report indicates that climate-related supply chain disruptions are increasing globally, yet most firms lack the tools to analyze and manage these rapidly evolving remote risks. 

Oliver Wyman also pointed out that many companies have inadequate visibility into their supply chains and struggle to identify and mitigate vulnerabilities. 

“As many as 85 percent of chief procurement officers are unable to evaluate risks beyond their first-tier suppliers, resulting in significant blind spots,” said the consulting firm.  

It added: “Companies typically attribute over 90 percent of their physical climate risk exposure to direct operations and less than 10 percent to their supply chains, where in reality most of their material disruption risks reside.”  

The study further highlighted that the implementation of AI and remote sensing will transform this landscape, enabling companies to monitor and identify the environmental impact of their material suppliers and dependent infrastructure. 

Moreover, these technologies will allow risk managers and chief procurement officers to analyze data comprehensively, pinpoint their companies’ key strategic exposures, and assess disruption risks, thereby enabling them to address critical vulnerabilities effectively. 

“Companies can begin to monitor their suppliers in real-time, anticipate disruptions, and make informed decisions about how to restructure supply chains to minimize risk,” the report highlighted.  

Earlier this month, another report from the International Energy Agency highlighted the crucial role advanced technologies will play in transitioning to more secure and sustainable energy systems. 

The IEA analysis also noted that the pace of deploying digital technologies in the energy sector will depend heavily on the ability to build a workforce with the right skills. 

Furthermore, the think tank revealed that advanced technologies have the potential to enhance energy efficiency, reliability, connectivity, and reduce emissions. 

Prioritizing sustainable financing 

The Oliver Wyman report emphasizes that companies should categorize their supply chain activities into sustainable and unsustainable operations. This approach provides a clearer understanding of the environmental impact in different areas. 

“With this disaggregated, near real-time view of a corporation’s environmental footprint and physical risk exposure, capital providers will be able to more confidently target sustainable finance toward climate-resilient green projects in brown sectors,” said the report.  

Furthermore, this practice will incentivize transition without starving high-carbon sectors of capital. 

In addition, insurers and banks will gain a comprehensive view of a company’s physical risk exposures across its operations, enabling them to develop customized risk management solutions for critical vulnerabilities. 

The report also underscores that transitioning to a net-zero, climate-resilient future is not only an existential necessity but also a significant opportunity to reshape the global economy. 

“Trillions of dollars a year of investment is needed — in low-carbon technologies and infrastructure, nature-based solutions, resilient supply chains, and new business models,” said the consulting firm.  

It added: “Companies and financial institutions better able to quantify environmental risks and reliably assess how investment opportunities align with transition objectives will have a distinct advantage.”  

Last year, consultancy firm Wood Mackenzie released a report stating that global annual investments of $2.7 trillion are necessary to achieve net-zero emissions by 2050 and prevent temperatures from rising above 1.5 degrees Celsius this century. 

The report emphasized that renewable energy sources such as wind and solar power must become the world’s primary sources of electricity to support the electrification of transport and the production of green hydrogen. 

In April, the IEA highlighted the need to scale up battery production to meet climate and energy security objectives set during the UN COP28 summit held in the UAE last year. 

At the event, nearly 200 countries agreed to triple global renewable energy capacity by 2030, accelerate energy efficiency improvements, and transition away from fossil fuels. 

The report also specified that achieving this goal would require deploying 1,500 gigawatts of battery storage by the end of this decade to support the expanded renewable energy capacity.


AI can help shipping industry cut down emissions, report says

AI can help shipping industry cut down emissions, report says
Updated 18 June 2024
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AI can help shipping industry cut down emissions, report says

AI can help shipping industry cut down emissions, report says

BENGALURU: The global commercial shipping industry could cut down its carbon emissions by 47 million tonnes per year by deploying artificial intelligence for sea navigation, a study by autonomous shipping startup Orca AI showed, according to Reuters.

The use of the technology could reduce the need for maneuvers and route deviation from close encounters with high-risk marine targets such as vessels, buoys and sea mammals by alerting the crew in real time, according to the report.

Shipping, responsible for moving about 90 percent of global trade, contributes nearly 3 percent to the world's carbon dioxide emissions. This share is anticipated to rise in the coming years unless stricter pollution control measures are implemented.

The International Maritime Organization aims to cut emissions by 20 percent by 2030, a target under threat from the ongoing Red Sea crisis.

"In the short term, it can lead to fewer crew members on the bridge, while those who are on the bridge will have a reduced workload and more attention to tackle complex navigational tasks, optimizing the voyage and reducing fuel and emissions," Orca AI CEO Yarden Gross told Reuters.

"In the long term, it will open the door to fully autonomous shipping."

Global carbon dioxide shipping emissions reached an estimated 858 million tonnes in 2022, a marginal rise from the previous year, according to the Organization for Economic Cooperation and Development.

An average of 2,976 marine incidents are reported per year, Orca AI's study showed.

The reduction in route deviations could help ships shave off 38.2 million nautical miles per year from their travel, saving an average of $100,000 in fuel costs per vessel, according to Orca AI's report.

AI could also lower close encounters by 33 percent in open waters, it said.


Saudi Arabia’s international reserves highest in 18 months at $467.5bn

Saudi Arabia’s international reserves highest in 18 months at $467.5bn
Updated 18 June 2024
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Saudi Arabia’s international reserves highest in 18 months at $467.5bn

Saudi Arabia’s international reserves highest in 18 months at $467.5bn

RIYADH: Saudi Arabia’s international reserve assets reached SR1.75 trillion ($467.5 billion) in May, the highest in 18 months and an annual 6 percent increase, according to new data. 

Figures released by the Saudi Central Bank, also known as SAMA, reveal that these holdings encompass monetary gold, special drawing rights, the International Monetary Fund’s reserve position, and foreign reserves.

According to May’s figures, international currency holdings – including currency and deposits abroad and investments in foreign securities – constituted 95 percent of the total, amounting to SR1.66 trillion.

This category also registered a 6 percent increase during this period.

SDRs comprised 4 percent of the total, amounting to SR77.68 billion, and increased by 0.3 percent during this period. 

Created by the IMF to supplement member countries’ official reserves, SDRs derive their value from a basket of major currencies: the US dollar, euro and Chinese yuan as well as the Japanese yen, and British pound. They can be exchanged among governments for freely usable currencies when needed. 

SDRs provide additional liquidity, stabilize exchange rates, act as a unit of account, and facilitate international trade and financial stability. 

The IMF reserve position totaled SR12.72 billion, however decreased by 14 percent during this period. This category essentially represents the amount a country can draw from the IMF without conditions.

Fitch Ratings announced in March that it had affirmed Saudi Arabia’s long-term foreign-currency issuer default rating at “A+” with a stable outlook.

The agency highlighted that the Kingdom’s position reflects its robust fiscal and external balance sheets. It also noted improvements in governance driven by social and economic reforms, as well as efforts to enhance government institution effectiveness.

Saudi Arabia’s ratings are bolstered by its strong fiscal and external balance sheets, with government debt to gross domestic product and sovereign net foreign assets significantly stronger than the “A” and “AA” medians and substantial fiscal buffers in the form of deposits and other public-sector assets.

According to the agency, the Kingdom benefits from considerable fiscal buffers and boasts one of the highest reserve coverage ratios among rated sovereigns, at 16.5 months of current external payments. 

Fitch anticipates reserves to decrease to an average of $420 billion by 2024 to 2025 due to a narrowing current account surplus offset by investments from entities like the Public Investment Fund.

Sovereign net foreign assets are also projected to remain above 50 percent of GDP during this period, surpassing the “A” median of 6 percent.

The IMF praised Saudi Arabia’s “unprecedented economic transformation” in a June report, attributing its success to prudent government policies and effective diversification efforts.

It also highlighted strong domestic demand, ongoing financial reforms, and environmental policies as key strengths in the Kingdom’s evolving economic landscape. 

Following its official visit to the country, the IMF projected Saudi Arabia’s GDP growth to accelerate to approximately 4.5 percent by 2025, stabilizing at 3.5 percent annually over the medium term.

Non-oil growth is expected to reach 3.5 percent in 2024 before further increasing from 2025 onwards. Despite a projected decline in oil output in 2024 due to production cuts, there is anticipation for a recovery in 2025.

The IMF emphasized that Saudi Arabia’s diversification efforts are yielding positive results, stressing the need to sustain non-oil growth momentum, ensure financial stability, and enhance business competitiveness.


UAE stock market cap surges by $5.79bn in 2024 with strong IPO activity

UAE stock market cap surges by $5.79bn in 2024 with strong IPO activity
Updated 18 June 2024
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UAE stock market cap surges by $5.79bn in 2024 with strong IPO activity

UAE stock market cap surges by $5.79bn in 2024 with strong IPO activity

RIYADH: The UAE’s stock market capitalization has surged by 21.3 billion dirhams ($5.79 billion) this year, thanks to three new initial public offerings launched since the beginning of 2024, according to a new analysis.  

Alef Education Holding, Parkin, and Spinneys 1961 Holding, were the firms to float on the market, and the moves significantly boosted liquidity, increased investment attractiveness, and reinforced the UAE’s position as a premier financial and business hub globally, according to the Emirates News Agency.    

These IPOs came as the market value of listed stocks in the UAE grew by over 444.5 billion dirhams throughout 2023, pushing the total market capitalization to 3.651 trillion dirhams by year-end.   

This growth fits in with the ambition of the country to double its stock market value to approximately 6 trillion dirhams in the coming years. 

Alef Education Holding’s IPO, the first on the Abu Dhabi Securities Exchange in 2024, led the way in 2024 with a market capitalization of around 9.45 billion dirhams. The company raised 1.89 billion dirhams by selling 1.4 billion shares, representing 20 percent of its total shares, at 1.35 dirhams per share.   

The IPO saw strong demand, surpassing the target subscription value by 39 times, even after the individual investor allocation was increased from 8 percent to 10 percent.  

Dubai’s exclusive operator of paid public parking, Parkin, achieved a market capitalization of 6.3 billion dirhams upon its March listing on the Dubai Financial Market, marking the first listing of 2024. 

Parkin’s listing garnered substantial interest from both international and regional institutional investors, along with individual investors in the UAE, resulting in total subscription requests reaching approximately 259 billion dirhams — nearly 165 times the subscription value. 

This strong demand underscores investor confidence in the company’s growth strategy as a robust investment opportunity, backed by the city’s steady economic performance and population expansion. 

In May, Spinneys 1961 Holding achieved a market capitalization of 5.5 billion dirhams upon its listing on the DFM, following a widely subscribed public offering. 

The premium grocery retailer attracted significant interest from regional and international investors, including institutions and individuals in the UAE, with total subscription requests amounting to approximately 71 billion dirhams. 

Demand exceeded the offering size by 64 times across all investor segments, excluding the anchor investor, marking the highest demand and coverage ratio for non-governmental IPOs on the DFM in recent years. 

A report titled “IPO+ Watch” by PwC in May indicated that IPOs in the Middle East are expected to continue their positive aftermarket performance in 2024, following significant gains in the first quarter. 

The report highlighted that private sector companies seeking liquidity and access to capital are anticipated to drive much of this activity, with Saudi Arabia and the UAE leading the way.  

Additionally, there is increasing momentum in markets such as Oman and Qatar, signaling broader regional expansion in IPO activity.