Urban development is an important area of expertise at Saihati Group, based in Eastern Province. It is involved in a variety of activities — construction, real estate, transport, industry, banking, trading, oil and gas consultancy and project management — 15 companies in all, making an annual turnover of more than SR1 billion. It employs about 2,000 people including a large number of expatriates. In addition to planning and development of cities, the group, launched 30 years ago by prominent Eastern Province businessmen Dr. Abdullah Saihati, also offers engineering design, petrochemical, power, water and communication services supported by multinational high-tech companies. In an interview with Arab News, Saihati speaks appreciatively about the new project to establish economic cities in various parts of the Kingdom spearheaded by Custodian of the Two Holy Mosques King Abdullah.
According to Saihati, economic city projects are essential to meet the requirements of a growing Saudi population. “These cities are essential to provide modern educational, health and housing facilities to our growing population and provide infrastructure for setting up high-tech industries with the support of foreign companies‚” he says, and praises the king for his vision and objectives. “King Abdullah is doing his best to bring about progress and prosperity all over the country,” he says.
Saihati, born in 1952 into a traditional business family in Saihat, 20 km east of Dammam, is optimistic that the new economic cities will herald a new era of development across the Kingdom. He sees them being filled with advanced technology industries and state-of-the-art infrastructure. “These cities will have great impact on business, workers and the general public. Everybody will benefit from them‚” he says.
Business groups will compete with one another to use the new cities as a springboard for their own growth, Saihati says, adding that his group was drawing up its own ideas in that regard. “We will be involved in various activities such as transportation, construction and project management. We have set up a special panel of experts comprising American and Far Eastern consultants to draw up a plan for the economic cities‚” he says.
Saihati believes that real estate properties are not overpriced in Saudi Arabia unlike other GCC countries, such as the UAE and Qatar. Makkah and Madinah are the “exception,” he says. Prices there will remain high “for many years,” he adds. Land prices elsewhere in the Kingdom would grow at the rate of 10 to 15 percent annually. Unsurprisingly, he encourages investment in real estate as a safe move.
Saihati supports the decision taken by many family and individual businesses to go public as a sensible development, adding that it will help them become more organized as well as generate more funds for expansion. “We do have a plan to go public in the near future, beginning with our transport and project management firms, which are high-tech companies‚” he adds.
Saihati is happy over the repatriation of Saudi funds abroad, especially after 9/11. “It is a double investment for them as they not only gain profits but they also support the country’s economic development.”
Asked about the flight of Saudi funds to nearby Gulf countries, he says those investors lacked patience and wanted to make quick profits. “It is good for them to keep their money in their own country. Saudi Arabia is much better and safer for them to invest as they can see how their projects are running. It also provides a larger market for their products‚” he explains.
He attributes the growing scale of foreign investment and the presence of leading Japanese, Chinese, European and American companies in the Kingdom to the Saudi investment climate. “The atmosphere is healthy and we have the right raw materials aplenty at the right price‚” he says.
Saihati highlights the progress achieved by Eastern Province during the past three decades. “There are advanced educational institutions of higher learning, modern hospitals and roads, and state-of-the-art communication facilities. I see a big future for this province and investors here,” he says, adding that many foreign companies, including those from Japan, China, Russia, India and the US, are involved in various projects there. So is his Saihati Group. It is actively involved in building infrastructure for Jubail II, which is designed to attract more than SR200 billion in investment. “New projects are coming up all the time in oil, gas and petrochemicals‚” he adds.
“The economic boom in the province will continue for many years as more business centers and industrial plants are opened in the region,” he said. He is optimistic that Eastern Province will make tremendous progress over the coming years with so many new projects planned, especially in energy and petrochemicals, drawing billions of dollars in investment.
Commenting on the Kingdom’s accession to the World Trade Organization, he says it could have a negative effect on small-scale industries. However, he points out that the WTO would encourage Saudi industries to be more competitive and cost-efficient by supplying quality products and ensuring good management. He advises small firms to merge with one another to withstand competition.
According to Saihati, the Kingdom’s Saudization drive was successful in providing jobs to a large number of young Saudis. “It is going in the right direction, especially in helping educated Saudis to get jobs. There is work for everybody, provided you are qualified and ready to work. The problem is to find jobs for the uneducated. They have to make an effort. They have to accept the situation and try to learn‚” he adds.
