JEDDAH, 7 July 2005 — Saudi Industrial Development Fund (SIDF) continued its outstanding performance in fiscal 2004 with loan commitments totaling SR3.29 billion, an increase of 20 percent over last year.
According to SIDF’s annual report, loans actually disbursed to investors over the year totaled SR1.77 billion, 32 percent more than 2003. Moreover, repayments made by borrowers to the fund amounted to SR1.51 billion, an increase of 7 percent over repayments last year.
SIDF approved 76 loans in 2004 to assist in the development of 43 new industrial and the expansion of 33 existing projects.
Since its inception in 1974, SIDF has approved 2,650 industrial loans with commitments totaling SR48.12 billion. These loans contributed to the development of 1,899 industrial projects all over the Kingdom. Loan disbursements from such commitments totaled SR33.01 billion, while repayments reached SR23.57 billion, reflecting the success of industrial development in the Kingdom.
Minister of Finance Dr. Ibrahim Al-Assaf said, “The success of these projects at the business level, which is based on systematic scrutinization of feasibility studies before approval, played a major role in their ability to meet their financial obligations toward the fund, thus enabling the fund to recommit these amounts in loans to many other new projects every year.”
Yousef ibn Ibrahim Al-Bassam, chairman of the board of directors, said, “The steady growth in the development of new projects and the high percentage of loans committed to the expansion of existing projects firmly reflect the success of investment in the national industrial sector, the high actual return of such projects and the confidence in the future of the sector within the group of well performing economic sectors in the Kingdom,” adding that “This would not have been possible without the generous support of the government to the various development sectors, elimination of obstacles in the way of investors and offers of a continued revision of incentives to ensure an attractive investment environment.”
Al-Bassam also referred to the new window of opportunity to be opened by the fund for the benefit of a critical sector of the national economy - the Small and Medium Enterprises Loan Guarantee Program. This program will be launched soon, offering its customized services to this key sector of the national economy.
Sectorwise loans approval showed, in 2004, SIDF approved 21 loans to chemical sector representing 28 percent of the total number of loans approved during the year. Total commitments to these loans amounted to about SR1.69 billion, representing 51 percent of loans approved. These loans were made to support the establishment of 13 new industrial projects and the expansion of 8 existing ones.
SIDF approved 25 loans to consumer products sector totaling SR531 million, representing 16 percent of loans approved. These loans assisted in financing 14 new projects and expanding 11 existing projects.
The SIDF report showed, engineering industries sector received 20 loans amounting to a total of SR296 million, or about 9 percent of the total lending value. These loans were made to finance 13 new projects and expansion of 7 existing projects. SIDF also approved four loan of SR661 million to cement sector representing 20 percent of lending.
Other building materials sector received 6 loans of SR111 million or 3 percent of all loan approvals during the year.
SIDF continues to encourage establishment of joint-venture projects in the Kingdom particularly in collaboration with internationally renowned companies on the basis that the elements of success in such projects are evident.
Acting Director General Mohammad ibn Salem Al-Dobaib said “Foreign investments are considered an effective means for transfer of modern technology; importation of capital and provision of access to international markets for national products,” adding that “Foreign partnerships contribute to the upgrading of production efficiency of the industrial sector by providing job opportunities and technically advance training for Saudi nationals.”
The number of joint-venture projects approved by SIDF since its inception up to end of 2004 increased to 538, or 28 percent of total projects approved with loans committed to these projects amounted to SR17.47 billion, or 36 percent of total SIDF loans.
