LONDON, 16 January 2005 — Britain’s Middle East Association (MEA) has postponed its trade mission to Saudi Arabia which was due to take place from Jan. 31 to Feb.9.
The association’s veteran mission leader, Lawrie Walker, confirmed to Arab News that “not enough British companies signed up for the mission to make it viable at that time. We have decided to give companies more time to come on board and have postponed the mission to March 14-23. This will be a broadly-based horizontal mission, aimed at making a good impact on the Saudi market.”
The preparation for the mission, which is sponsored by the British Offset Office, started before the Christmas period. Perhaps potential British participants did not have enough time to prepare for the mission.
However, several British companies have expressed concerns over security in Saudi Arabia, where foreigners have been targeted over the last two years in particular. The original date for the mission also coincides with scheduled elections in Iraq. Given the current levels of violence there, there are fears that tension could spill over to neighboring countries.
The association did organize two successful trade missions to the Kingdom in May and September/October last year. The March 2005 mission will spend three days in Riyadh and Jeddah and two in the Eastern Province.
“The Saudi economy,” says the association, “boosted by high oil prices and production levels, as well as a construction boom, is buoyant, and this is likely to continue well into the future, promising steady growth throughout 2005.” The association identifies many new opportunities for British companies across a range of sectors, including oil and gas, petrochemicals, construction, power and water, education and training, healthcare, telecoms, and tourism and the leisure industry.
The Kingdom remains the UK’s single largest trading partner in the MENA (Middle East & North Africa) region. UK visible exports to Saudi Arabia topped 1.8 billion pounds in 2003. UK “invisible” exports (services, insurance, banking) to the Kingdom totaled more than 2 billion pounds in 2003.
At a MEA seminar on Saudi Arabia held in London last July, Prince Turki Al-Faisal, ambassador in London, stressed that the UK is the Kingdom’s third largest trading partner after the US and Japan, “indicating that there is a high regard for British products. But the balance is heavily in the UK’s favor, and we need to redress this.”
The fact that Saudi Arabia is a net importer of everything except crude oil, petrochemicals, and fuels; and that it has a population where 70 percent is under the age of 25; makes it a very attractive export and consumer market for foreign companies.
Saudi Aramco for instance has projected expenditure of a staggering $19.9 billion for 2005-2009 in new projects, materials and services. Over the next five years, Saudi Aramco plans five new crude increments; a new NGL recovery plant and the expansion of the master gas system; the expansion and upgrade of refinery and distribution facilities; and the development of research and technology alliances.
Saudi Telecoms is projecting expenditure of $30 billion over the next few years; the IT market is projected at $4.7 billion; and Saudi Arabian Basic Industries Corporation (SABIC) has announced a global expansion strategy which has seen the petrochemicals giant acquire DSM Petrochemicals in Holland and a stake in Mexican petrochemical company Pemex. SABIC is now a global player in the petrochemicals sector with 17 affiliate companies, and a portfolio of 15 major projects at various stages of development worth $3 billion.
Vocational training; healthcare; and telecoms and IT also offer exceptional opportunities. In the power sector, demand is forecast to outstrip supply in 2005; with the result that there are plans to double current capacity by 2020 at an estimated cost of SR44 billion.
However, with the uncertainties in the Middle East region, especially in Iraq and post-Arafat Palestine, UK trade with the region, even with the GCC states, says the Middle East Association, is suffering. This comes ironically at a time when GCC spending power is at an all-time high thanks to the high oil revenues.
