RIYADH, 27 February 2005 — Amr Al-Dabbagh, governor of the Saudi Arabian General Investment Authority (SAGIA), has invited the British to consider investing in IT, telecommunications and transportation sectors where multibillion dollar investment opportunities await them.
“The training sector alone is evaluated in the market at around $2.4 billion and is expected to grow by up to six percent annually,” he told a London audience at a strategic forum, Saudi Arabia-Securing the Future in the UK” held there last week.
He noted that the Kingdom had taken a strategic shift toward e-commerce to streamline government operations.
The governor said Britain’s 33 percent increase in exports to the Kingdom demonstrates the ongoing strength of the Kingdom’s investment ties with British firms. The UK is the second largest overseas investor in Saudi Arabia with the stock of UK investment currently estimated at some $3.5 billion. The estimated value of the UK’s invisible earning from the Kingdom amounts to around twice that of exports in goods.
Referring to investment opportunities in the Kingdom, Al-Dabbagh said the IT industry was poised for exponential growth with almost 70 percent of the Kingdom’s population below 30 years of age. Official statistics indicate that the Kingdom’s IT employment sector has maintained a growth rate of four percent per annum, creating around 8,000 new jobs per year. Three percent of the Saudi work force, about 200,000, is involved in IT.
This sector will remain vibrant for years to come, since some 21,000 schools will be equipped with PCs, leading to accelerated domestic demand.
The SAGIA governor also make a pointed reference to the $7 billion telecommunications infrastructure, which was expected to expand with a second mobile phone operator set to penetrate the market on a massive scale, especially as the youth were the main driving force behind the dynamics of growth in the mobile phone sector.
Another promising sector, he observed, was the transportation which, with an estimated value of over $50 billion, was headed for enormous growth. The engine of growth there would be the Landbridge, an extensive railway network that will connect the port cities of Jeddah, Dammam and Jubail via Riyadh to form what will become the hub of a regional market of over 250 million people.
The governor added that together with these factors, prospective British investors should also take into account the fact that the Saudi government was constantly monitoring and upgrading the investment climate to keep pace with internationally accepted standards. “This is aside from a fertile infrastructure that includes a strong currency, a historically low rate of inflation, political and economic stability, rapid development trends, large local output and strong purchasing power.”
Even as the London conference was taking place, Danish-based dairy giant Arla Foods announced that it plans to transfer production of processed cheese from Bislev Dairy in Northern Jutland, Denmark, to Saudi Arabia, leading to the loss of 60-70 jobs in that country.
The move was part of Arla Foods’ plans to expand and maintain its position as market leader in the Middle East within the cheese, butter and cream sectors. “The aim is to double sales from the current 60,000 tons per year by 2010.
“Middle Eastern consumers are increasingly demanding fresh, locally produced products,” said Finn Hansen, executive director of Arla’s overseas division. “The intention is for new products produced in the Middle East to account for 20 percent of our turnover there.”
